Thanks to an
eleventh-hour rebound
, stocks kicked off the week on a high note yesterday. This
morning, however, futures are pointed modestly lower, after China
reportedly hampered enthusiasm about a deal to buy Italian debt.
Specifically, a
Financial Times
report suggesting that China will make "significant purchases of
Italian bonds and investments in strategic companies" sparked
optimism across the globe, but an alleged interview with a Chinese
banking official in
Market News International
indicated the deal was far from done. Against this ambiguous
backdrop, investors are taking a relatively cautious approach, with
the Dow Jones Industrial Average (DJIA) trading just south of
breakeven ahead of the bell.
In earnings news, Cracker Barrel (CBRL - 39.86) said
fourth-quarter profit fell 36% to $17.5 million, or 75 cents per
share, from $27.4 million, or $1.14 per share, in the year-ago
quarter. Excluding items, the restaurateur said it earned $1 per
share, topping Wall Street's expectations for a profit of 94 cents
per share. Revenue, meanwhile, remained relatively flat at $613
million, falling short of the consensus estimate for sales of
$619.9 million. Looking ahead, CBRL expects to earn $4.05 to $4.20
per share in fiscal 2012, compared to analysts' average estimate
for a per-share profit of $4.25. However, the company hiked its
quarterly dividend by 14% to 25 cents per share and approved a
stock buyback plan of up to $65 million.
Elsewhere, Pharmacyclics (PCYC - 10.98) reported an adjusted
fourth-quarter loss of $9.1 million, or 15 cents per share, while
revenue arrived at $1.39 million. The results fell short of Wall
Street's consensus estimates, which called for a slimmer loss of 14
cents per share on $2.7 million in revenue. "While all three of our
in-clinic molecules performed admirably, Btk Inhibitor PCI-32765
was in all forms of measurement truly outstanding," said Chairman
and CEO Bob Duggan. "We plan to initiate our first Phase III trial
for 32765 in this fiscal year ending June 30, 2012."
Finally, Intersil (ISIL - 10.65) last night cut its
third-quarter revenue guidance, citing weaker-than-expected demand.
Now, the semiconductor concern expects to earn $184 million to $188
million in the current quarter, compared to its previous
projections for earnings between $205 million and $213 million.
However, CEO Dave Bell offered some words of encouragement. "We now
see signs that inventory is stabilizing, with bookings likely
recovering to consumption rates during the remainder of the third
quarter," he said. Ahead of the bell, the shares of ISIL are up
3.5%.
Earnings Preview
Today's earnings docket will also feature reports from Best Buy
(
BBY
), Majesco Entertainment (
COOL
), K12 Inc. (
LRN
), and PMFG Inc. (
PMFG
). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
Today, the government's monthly report on import and export
prices, as well as Uncle Sam's latest Treasury budget, is set to
hit the Street. On Wednesday, a batch of housing data from the
Mortgage Bankers Association (
MBA
), the producer price index (PPI) for August, last month's retail
sales figures, business inventories for July, and the usual crude
inventories report are on the docket. Thursday features the weekly
jobless figures from the Labor Department, the Empire State
manufacturing index, the Philly Fed business index, the consumer
price index (CPI), and industrial production and capacity
utilization for August. Friday wraps up with the preliminary
Reuters/University of Michigan consumer sentiment index for
September.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 849,212 call contracts traded on Monday, compared to
610,703 put contracts. The resultant single-session put/call ratio
arrived at 0.72, while the 21-day moving average was 0.75.
The summer 2011 issue of
SENTIMENT
magazine is now available here.
Overseas Trading
Stocks in Asia stumbled toward the finish line today, with
trading volume still relatively light amid regional holiday
celebrations. Early in the session, cautious optimism was inspired
by the aforementioned
Financial Times
report suggesting that China will make "significant purchases of
Italian bonds and investments in strategic companies." With the
cash-strapped European country in desperate need of a financial
lifeline, the news helped Japan's benchmark to a positive finish --
but traders on the Chinese mainland seemed a little less
enthusiastic about the plan. By the close, Japan's Nikkei added
roughly 1%, while China's Shanghai Composite slipped 1.1%. Markets
in Hong Kong and South Korea were closed for holiday.
European indexes are mixed at midday, with traders digesting a
potential Chinese "rescue" of Italy. However, French banks are
still under heavy pressure, even after BNP Paribas refuted a
Wall Street Journal
allegation that the bank cannot obtain U.S. dollar funding. The
speculation is also weighing on sector peer Societe Generale, which
has battled its own liquidity rumors in recent weeks. At midday,
the German DAX is up 0.9%, London's FTSE 100 has given up 1.4%, and
the French CAC 40 is 0.6% lower.
Currencies and Commodities
The greenback is on the decline this morning, with the U.S.
dollar index down 0.5% at last look. Elsewhere, after snapping a
two-session losing streak on Monday, crude oil futures have
continued their upward momentum, with the front-month contract up
88 cents, or 1%, at $89.19 per barrel. Finally, gold futures have
bounced back from yesterday's drubbing, tacking on $2.80, or 0.2%,
to flirt with $1,816.10 an ounce.
Unusual Put and Call Activity:
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