U.S. stocks are pointed lower in pre-market action, as Wall
Street eyes both Europe and the latest batch of blue-chip earnings
reports. Specifically, Greece remains in the overseas spotlight,
with the cash-strapped nation still attempting to
negotiate a deal with private creditors
. On the home front, meanwhile, DuPont (
DD
) was among the notable Dow components to step into the earnings
confessional, while Texas Instruments (
TXN
) and VMware (
VMW
) are setting the tone for the tech sector. Against this busy
backdrop, the Dow Jones Industrial Average (DJIA) is trading almost
59 points below fair value, while the broader S&P 500 Index
(SPX) is poised to
snap its winning streak
.
In earnings news, DuPont (DD - 49.35) reported fourth-quarter
income of $373 million, or 40 cents per share -- relatively flat
with the year-ago period. Excluding items, DD earned 35 cents in
the fourth quarter. Net sales increased 14% to $8.43 billion.
Analysts, on average, were anticipating an adjusted per-share
profit of 33 cents on revenue of $8.53 billion. At last check, DD
is trading just south of breakeven.
VMware, Inc. (VMW - 86.00) last night reported both
fourth-quarter and full-year earnings. For the quarter, VMW's
profit rose to $200 million, or 46 cents per share, a 67% jump over
last year's profit of $120 million, or 28 cents per share. On an
adjusted basis, VMW earned 62 cents per share, while revenue
climbed a year-over-year 27% to $1.06 billion. The quarterly
results just beat analysts' expectations for adjusted earnings of
60 cents per share on $1.05 billion in revenue. Earnings doubled
for fiscal 2011, arriving at $724 million, or $1.68 per share, with
revenue increasing 32% to $3.77 billion. Excluding items, the tech
concern banked a full-year profit of $2.17 per share. Looking
ahead, VMW sees fiscal first-quarter and full-year revenue to range
between $1.02 billion and $1.04 billion, and $4.48 billion and $4.6
billion, respectively, with analysts forecasting revenue of $1.02
billion and $4.51 billion, respectively. In pre-market trading, VMW
is pointed 5.2% higher.
Texas Instruments (TXN - 33.19) reported a fourth-quarter profit
of $298 million, or 25 cents per share - down 68% from $942
million, or 78 cents per share, a year ago. Revenue, meanwhile,
dipped 3% to $3.42 billion. Analysts, on average, were calling for
a heftier per-share profit of 39 cents, though sales exceeded the
consensus forecast of $3.25 billion. Plus, as Chairman and CEO Rich
Templeton noted, "Revenue in the fourth quarter was higher than
expected across all our major product lines, reinforcing our belief
that we're at the bottom of this downturn." Going forward, TXN
forecast first-quarter earnings of 16 cents to 24 cents per share
on sales of $3.02 billion to $3.28 billion. For comparison, Wall
Street expects current-quarter earnings of 41 cents per share on
revenue of $3.23 billion. Ahead of the bell, TXN is set to open
with a 0.9% lead.
Finally, Western Digital (WDC - 34.71) said its fiscal
second-quarter profit fell 36% to $145 million, or 61 cents per
share, from last year's profit of $225 million, or 96 cents per
share. On an adjusted basis, WDC's earnings came in at $1.51 per
share. Revenue slipped 19% to $2 billion. Results for the
hard-drive maker topped predictions, as Wall Street was looking for
earnings of 71 cents per share on $1.84 billion in sales. For the
current quarter, WDC forecast an adjusted profit of $1.15 to $1.45
per share on sales of $2 billion to $2.15 billion. Analysts are
expecting a profit of 91 cents per share on sales of $2.05 billion.
At last look, WDC is pointed 5.2% higher.
Earnings Preview
Today's earnings docket will also feature reports from
McDonald's (
MCD
), Johnson & Johnson (
JNJ
), Travelers (TRV), Verizon Communications (VZ), Apple (AAPL),
Yahoo (YHOO), Coach (COH), Baker Hughes (BHI), EMC Corp. (EMC),
Harley-Davidson (HOG), and AK Steel (AKS). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The economic calendar kicks off today, with the Richmond Fed's
business activity survey on tap, and President Obama's State of the
Union address slated to hit airwaves after hours. On Wednesday, the
latest pending home sales data and the regularly scheduled crude
inventories report will hit the Street, though traders will most
likely be consumed by the Federal Open Market Committee's (FOMC)
interest-rate decision and Fed Chairman Ben Bernanke's post-meeting
speech. Thursday's economic agenda heats up with reports on jobless
claims, durable goods, new home sales, and the Conference Board's
index of leading indicators. Finally, Friday wraps up with the
government's fourth-quarter gross domestic product (GDP) estimate,
as well as the final Thomson Reuters/University of Michigan
consumer sentiment figures for January.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,314,148 call contracts traded on Monday, compared to
852,437 put contracts. The resultant single-session put/call ratio
arrived at 0.65, while the 21-day moving average was 0.62.
Overseas Trading
Stocks in Tokyo ended slightly higher today, with traders
looking past a stand-off between Greece and its private
bondholders. Toyota Motor (TM) was a notable gainer, one day after
the automaker unveiled plans to cut 350 jobs from its Australian
manufacturing operations. Meanwhile, the European Union's decision
to block oil imports from Iran provided a tailwind for energy
stocks. However, equities trimmed their gains after the Bank of
Japan lowered its growth forecasts for fiscal 2011 and 2012, citing
"the slowdown in overseas economies" as one catalyst behind the
move. By the close, Japan's Nikkei was up 0.2%. Markets in Hong
Kong, China, and South Korea remain closed for holiday.
European markets are in the red at midday, with traders on edge
after euro-zone finance ministers rejected a restructuring offer
from Greek bondholders. Also stoking anxiety is a
Wall Street Journal
report suggesting that Portugal may need another bailout, as the
country attempts to dig out from a 9 billion euro debt load that
matures in September 2013. At last look, the French CAC 40 is down
1.2%, the German DAX is off 1%, and London's FTSE 100 is 0.8%
lower.
Currencies and Commodities
The greenback is trading fractionally higher this morning, with
the U.S. dollar index up almost 0.1% at last check. Crude oil,
meanwhile, remains
stuck south of the century mark
, with the front-month contract down 0.3% to linger near $99.26 per
barrel. Elsewhere, gold futures have pulled back from
six-week highs
, with the malleable metal down 0.6% to flirt with $1,668.10 an
ounce.
Unusual Put and Call Activity:
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Education Center
topics on
Option Volume
and
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.
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