Opening View: DJIA, SPX Pointed Higher Ahead of Italy's Budget Vote

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U.S. stocks are set to continue Monday's uptrend this morning, as Wall Street eyes Italy ahead of a key budget vote. Specifically, the Italian parliament's routine budget vote could pave the path for a vote of confidence -- and possibly Prime Minister Silvio Berlusconi's removal from power . Already, Umberto Bossi -- once one of the premier's key allies -- has asked Berlusconi to step down, according to The Wall Street Journal . Against this backdrop, the Dow Jones Industrial Average (DJIA) is trading almost 63 points north of fair value, while the broader S&P 500 Index (SPX) is flirting with a 6.5-point lead.

Dow, S&P and Nasdaq futures

In earnings news, Priceline.com (PCLN - 509.00) said its third-quarter profit more than doubled to $469.7 million, or $9.17 per share, from $223 million, or $4.41 per share, in the same period last year. On an adjusted basis, earnings arrived at $9.95 per share, while revenue surged 45% to $1.45 billion. Both figures surpassed Wall Street's forecast for earnings of $9.30 per share on $1.42 billion in revenue. For the current quarter, the online travel company expects per-share earnings between $4.90 and $5 on revenue growth of 27% to 32%. Analysts, however, were predicting a fourth-quarter profit of $5.13 per share on revenue growth of 36%. Ahead of the bell, PCLN is pointed almost 3% higher.

Meanwhile, DryShips (DRYS - 2.72) reported third-quarter earnings of $25 million, or 7 cents per share, down 57% from its year-ago earnings of $57.7 million, or 21 cents per share. DRYS attributed the year-over-year profit decline to losses incurred on interest rate swaps, as well as higher expenses. Excluding items, DRYS earned 16 cents per share, while revenue jumped 41% to $318 million. Analysts, on average, were projecting a profit of 14 cents per share on revenue of $298.4 million. This is the first time in four quarters that DRYS has bested Wall Street's bottom-line expectations. At last check, DRYS is set to open with a 4.8% gain.

American Public Education (APEI - 34.58) revealed a better-than-expected third-quarter profit of $10.9 million, or 60 cents per share, up 95% from $5.6 million, or 30 cents per share, in the year-ago period. Meanwhile, revenue rose by 35% to $65.3 million. The quarterly results were bolstered by a 53% increase in new student enrollments. Analysts, on average, were expecting a profit of 42 cents per share on revenue of $62.4 million. For the fourth quarter, APEI is expecting a profit between 58 cents and 60 cents per share, on revenue growth of 29%. Analysts, however, are forecasting earnings of 64 cents per share.

Finally, Rackspace Hosting (RAX - 41.75) banked a third-quarter profit of $19.9 million, or 14 cents per share, up 69% from $11.8 million, or 9 cents per share, in the year-ago quarter. Revenue increased 32.5% to $264.6 million. RAX's bottom-line performance fell right in line with analysts' estimates, while revenue surpassed the consensus forecast for $261.6 million. In pre-market trading, RAX is lingering about 5.9% north of breakeven.

Earnings Preview

Today's earnings docket will also feature reports from Activision Blizzard ( ATVI ), Blue Nile ( NILE ), Caribou Coffee ( CBOU ), Carrizo Oil and Gas ( CRZO ), China Automotive Systems ( CAAS ), Clean Energy Fuels (CLNE), EnergySolutions (ES), E.W. Scripps (SSP), Fossil (FOSL), Fuel Tech (FTEK), Hecla Mining (HL), STEC (STEC), Take-Two Interactive Software (TTWO), Toyota Motor (TM), and Vodafone (VOD). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The NFIB small business optimism index is slated to hit the Street today. Data on wholesale inventories is due out Wednesday, along with the usual report on domestic petroleum supplies. Thursday brings a relative onslaught of economic news, including import/export prices, the U.S. trade balance, the Treasury budget, and the weekly report on jobless claims. The week wraps up on Friday with the Thomson Reuters/University of Michigan consumer sentiment survey for early November.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 722,228 call contracts traded on Monday, compared to 476,514 put contracts. The resultant single-session put/call ratio arrived at 0.66, while the 21-day moving average was 0.67.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended mostly lower, as lingering concerns over the European debt crisis applied pressure to exporters across the board. Italy remains in the spotlight today, with investors keeping a wary eye on the cash-strapped country as parliament prepares for a critical vote on budget reforms. The Rome-related anxiety weighed heavily on Nomura, which maintains sizable exposure to Italian government securities; shares of the brokerage firm dropped nearly 15% on heavy volume. Meanwhile, traders in China remained mostly on the sidelines ahead of Wednesday's inflation data. By the close, Japan's Nikkei fell 1.3%, South Korea's Kospi dipped 0.8%, China's Shanghai Composite pulled back 0.2%, and Hong Kong's Hang Seng finished fractionally higher.

On the other hand, European indexes are on the upswing at midday. Italian bond yields remain elevated ahead of today's budget vote, but traders are cheering positive quarterly earnings from the likes of Lloyds Banking Group, Marks & Spencer, and Vodafone. Even embattled French bank Societe Generale managed to gain ground on the heels of its earnings release, with the financial firm axing its dividend and cutting bonuses to bolster capital. At last check, the French CAC 40 is up 2.2%, the German DAX has added 2.6%, and London's FTSE 100 is 1.8% higher.

Overseas markets

Currencies and Commodities

The greenback is trading fractionally higher this morning, with the U.S. dollar up about 0.1% at last check. Elsewhere, crude futures have continued their quest for multi-month peaks, with the front-month contract last seen 56 cents, or 0.6%, higher at $96.08 per barrel. On the flip side, gold futures are trading just south of breakeven, with the precious metal down 70 cents at $1,790.40 an ounce.

Currencies and commodities

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This article appears in: Investing , Options

Referenced Stocks: ATVI , CAAS , CBOU , CRZO , NILE

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