U.S. stocks have seemingly shrugged off yesterday's
Apple- and Beige Book-induced losses
, though lingering concerns about the euro zone have limited the
bulls' momentum. Specifically, last night's surprise meeting
between French President Nicolas Sarkozy, German Chancellor Angela
Merkel, and other international officials has bolstered fears about
regional unity over the euro-zone rescue fund, though a document
obtained by Reuters has eased a few jitters ahead of Sunday's
highly anticipated summit in Brussels. On the home front,
meanwhile, big-cap earnings reports continue to roll in, with Wall
Street digesting the latest quarterly figures from American Express
(
AXP
) and eBay (
EBAY
), just to name a few. Ahead of the bell -- and a slew of economic
reports -- the Dow Jones Industrial Average (DJIA) is trading about
39 points above fair value, while the broader S&P 500 Index
(SPX) is flirting with a 5.6-point lead.
In earnings news, American Express (AXP - 46.13) collected a
third-quarter profit of $1.24 billion, or $1.03 per share, up 13%
from last year's earnings of $1.09 billion, or 90 cents per share.
Revenue for the period rose 9% to $7.6 billion, while consolidated
expenses increased 10%, on an adjusted basis, to $5.6 billion.
Analysts were expecting the financial services firm to earn 96
cents per share on $7.58 billion in revenue. "Against the backdrop
of an uncertain economic environment, we are focused on maintaining
a strong risk profile and carefully managing expenses," noted
Chairman and CEO Kenneth I. Chenault. Ahead of the bell, AXP is
hovering just north of breakeven.
Elsewhere, eBay (EBAY - 33.18) last night said its third-quarter
earnings rose 13% to $490.5 million, or 37 cents per share, from
$431.9 million, or 33 cents per share, a year earlier. Excluding
items, the online auctioneer said earnings rose to 48 cents from 40
cents per share. Sales, meanwhile, increased 32% to $2.97 billion.
The results were slightly better than expected, with analysts
calling for a per-share profit of 48 cents on revenue of $2.91
billion. What's more, the company said it now expects full-year
earnings of $1.98 to $2.01 per share on revenue of $11.5 billion to
$11.6 billion. Previously, EBAY projected a per-share profit of
$1.97 to $2 on sales of $11.3 billion to $11.6 billion. However,
the forecast fell on the low end of Wall Street's estimates, with
analysts calling for a full-year profit of $2 per share on revenue
of $11.53 billion. In pre-market trading, EBAY has shed 4.8%.
Also, E*Trade Financial (ETFC - 9.40) reported a third-quarter
profit of $71 million, or 24 cents per share, substantially higher
than last year's earnings of $8 million, or 3 cents per share. In
addition, revenue rose to $507 million from $489 million on a
year-over-year basis. The results were mixed, as analysts had
predicted earnings of 18 cents per share on revenue of $520
million. ETFC's loan-loss provision fell 35% to $98 million during
the quarter, and the online broker's bottom-line results were
boosted by a tax benefit worth 21 cents per share. However, the
company did not provide an update on the status of the strategic
review being performed by Goldman Sachs. At last check, ETFC is
flirting with breakeven.
Finally, Cirrus Logic (CRUS - 17.01) said its fiscal
second-quarter profit fell 64% to $11.2 million, or 17 cents per
share, from last year's profit of $30.9 million, or 42 cents per
share. Revenue, meanwhile, rose 1% to $101.6 million. CRUS' results
came in well below analysts' expectations for a profit of 33 cents
per share on $103 million in revenue. "While we are seeing softness
in some areas of our business due to issues in the global economy,
we still expect significant year-over-year revenue growth in Q3,
and we are well positioned to capitalize on some extraordinary
growth opportunities," stated CEO Jason Rhode. For the third
quarter, the semiconductor company predicted sales of $102 million
to $108 million, while analysts are looking for $108 million in
sales. Ahead of the bell, CRUS is set to open with a 12.7%
drop.
Earnings Preview
Today's earnings docket will also feature reports from Acme
Packet (
APKT
), Alexion Pharmaceuticals (
ALXN
), Altera (
ALTR
), AT&T (T), AutoNation (AN), Blackstone Group (BX), Boston
Scientific (BSX), Capital One Financial (COF), Chipotle Mexican
Grill (CMG), Cypress Semiconductor (CY), Diamond Offshore Drilling
(DO), Eli Lilly (LLY), Fifth Third Bancorp (FITB), Huntington
Bancshares (HBAN), KeyCorp (KEY), McGraw-Hill Companies (MHP), New
York Times Co. (NYT), Philip Morris (PM), Rambus (RMBS), SanDisk
(SNDK), Synaptics (SYNA), and Southwest Airlines (LUV). Keep your
browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The usual report on weekly jobless claims is due out today, as
well as existing home sales for September, the October Philadelphia
Fed index, and the Conference Board's index of leading economic
indicators. There are no major economic reports scheduled for
Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,101,987 call contracts traded on Wednesday, compared
to 789,216 put contracts. The resultant single-session put/call
ratio arrived at 0.72, while the 21-day moving average was
0.71.
Overseas Trading
Asian stocks ended lower today, thanks to fresh concerns about
the euro zone. Reports indicate a growing rift between the
International Monetary Fund (IMF) and the European Union (EU)
regarding the next payment of aid to Greece, raising doubts that
meaningful progress could be made on the debt crisis at this
weekend's summit of EU leaders. Traders also responded to a
downbeat U.S. Beige Book, with resource stocks slipping amid lower
commodity prices. By the close, South Korea's Kospi slid 2.7%,
China's Shanghai Composite shed 1.9%, Hong Kong's Hang Seng gave up
1.8%, and Japan's Nikkei dipped 1%.
European indexes are also in the red at midday, as traders price
in some uncertainty ahead of the EU summit. In addition to the
rumored IMF/EU conflict, French President Sarkozy on Wednesday
missed the birth of his daughter, with the leader hopping a flight
to Berlin to debate with German Chancellor Merkel about the best
way to bolster the European Financial Stability Facility (EFSF).
However, regional benchmarks have trimmed their losses after
Reuters reported that the EFSF will now be empowered to buy bonds
in secondary markets. At last check, the German DAX and London's
FTSE 100 have each declined 0.4%, while the French CAC 40 has shed
0.5%.
Currencies and Commodities
The greenback has given up some of its
Beige Book-induced gains
this morning, with the U.S. dollar index down 0.3% at last look. On
the other hand, crude futures have pared some of yesterday's
losses, with the front-month contract up 0.2% ahead of the bell.
Gold futures, however, have
extended yesterday's retreat
, with the precious metal last seen $21.70, or 1.3%, lower at
$1,625.30 an ounce.
Unusual Put and Call Activity:
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Education Center
topics on
Option Volume
and
Open Interest Configurations
.
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