The major market indexes are set to snap their five-session
winning streak, thanks to revived concerns about the fiscal health
of Europe. A relatively unproductive weekend summit of European
) finance ministers and U.S. Treasury Secretary Timothy Geithner
did little to bolster sentiment, as did a regional election defeat
for German Chancellor Angela Merkel. In addition, reports that
Greek Prime Minister George Papandreou took part in an emergency
meeting to address his country's budget shortfall have investors on
edge, especially ahead of a scheduled conference call between
Finance Minister Evangelos Venizelos and representatives from
several international finance agencies. Against this uncertain
backdrop, the Dow Jones Industrial Average (DJIA) is bracing for a
triple-digit drop out of the gate, while the S&P 500 Index
(SPX) is set to open roughly 16 points in the red.
In earnings news, Lennar (LEN - 13.80) said fiscal third-quarter
earnings fell 31% to $20.7 million, or 11 cents per share, while
revenue dropped 0.6% to $820.2 million. Analysts, on average, were
expecting the home builder to post a profit of 10 cents per share
on sales of $820.6 million. "We have seen demand for home purchases
slowly return to the marketplace, driven by low home prices and
all-time low interest rates," said CEO Stuart Miller. Ahead of the
bell, the shares of LEN are set to open about 3.3% higher.
In equities news, Tyco International (TYC - 43.70) unveiled
plans to split into three publicly traded companies. The firm said
its shareholders would own a 100% stake in each of the three
entities, which consist of the ADT North America residential
security business, flow control products and services, and the
commercial security and fire business. Tyco said it expects the
transaction to be completed in about a year, and is anticipating
one-time transaction costs of about $700 million. In pre-market
trading, the shares of TYC have skyrocketed more than 9%.
Finally, Netflix (NFLX - 155.19) said it is separating its
streaming movie business and its DVD delivery business, which will
be known as "Qwikster." "It's hard for me to write this after over
10 years of mailing DVDs with pride, but we think it is necessary
and best," wrote CEO Reed Hastings via NFLX's corporate blog.
Furthermore, Hastings admitted that he "messed up" in the way he
handled the firm's recent -- and highly controversial -- price
hikes, saying that "it is clear from the feedback over the past two
months that many members felt we lacked respect and humility."
However, he said, "that was certainly not our intent, and I offer
my sincere apology." Nevertheless, the shares of NFLX are pointed
1.3% lower in pre-market action.
Today's earnings docket will also feature a report from Accuray
). Keep your browser at
for more news as it breaks.
The economic calendar kicks off today with the NAHB housing
market index for September. On Tuesday, housing starts and building
permits for August are set to hit the Street. All eyes will be on
the Federal Open Market Committee (FOMC) this Wednesday, when the
group reveals its latest decision on monetary policy. Also on the
day's calendar are existing home sales for August and the regularly
scheduled report on petroleum supplies. Initial jobless claims are
on the docket for Thursday, along with the Conference Board's index
of leading economic indicators for August. There are no major
economic reports scheduled for Friday.
Equity option activity on the Chicago Board Options Exchange (
) saw 1,241,722 call contracts traded on Friday, compared to
837,458 put contracts. The resultant single-session put/call ratio
arrived at 0.67, while the 21-day moving average was 0.74.
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Asian markets ended broadly lower today, with familiar concerns
about European debt setting the tone.
The Wall Street Journal
reported that Greek Prime Minister Papandreou took part in
emergency meetings Sunday to address his country's budget crisis,
after the International Monetary Fund (
), European Central Bank (ECB), and European Commission (
) demanded "a credible plan to meet [Greece's] deficit reduction
commitments" before doling out any aid. By the close, Hong Kong's
Hang Seng lost 2.8%, China's Shanghai Composite shed 1.8%, and
South Korea's Kospi gave up 1%. Markets in Japan are closed for
European stocks are also wallowing in red ink, with speculation
swirling about a potential Greek default ahead of a planned
conference call between Finance Minister Venizelos and
representatives from the IMF, ECB, and EC. Political turmoil is
also fueling the bears, after German Chancellor Merkel's
conservative party lost a regional vote to Social Democrats.
Against this uneasy backdrop, banks are among the top decliners,
with Societe Generale taking a dive in Paris and Barclays stumbling
lower in the U.K. At midday, the German DAX is down 2.5%, the
French CAC 40 has surrendered 2.4%, while London's FTSE 100 has
Currencies and Commodities
The greenback has continued its recent ascent this morning, with
the U.S. dollar index up about 0.6% at last look. Elsewhere, crude
oil futures have extended Friday's slide, with the front-month
contract down 81 cents, or 0.9%, at $87.37 per barrel. Gold
futures, on the other hand, are trading modestly higher. At last
check, the front-month contract has tacked on $7.70, or 0.4%, to
linger near $1,822.40 an ounce.
Unusual Put and Call Activity:
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