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.
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.
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.
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.
Unusual Put and Call Activity:
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.
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