Opening View: DJIA, SPX Poised to Extend Weekly Gains on Solid Payrolls Report


Shutterstock photo

U.S. stocks are pointed higher ahead of the bell, as Wall Street absorbs the government's highly anticipated nonfarm payrolls report. According to the Labor Department, the U.S. created 200,000 jobs in December, compared to expectations for an increase of about 150,000 jobs. What's more, the unemployment rate dipped to 8.5% from 8.6% in November, besting expectations for a rise to 8.7%. Against this upbeat backdrop, the Dow Jones Industrial Average (DJIA) and its major market peers are poised to add to their New Year-week gains.

Dow, S&P and Nasdaq futures

In earnings news, Family Dollar Stores, Inc. (FDO - 57.96) said its fiscal first-quarter profit rose to $80.4 million, or 68 cents per share, an 8.1% improvement from $74.3 million, or 58 cents per share, in the year prior. Revenue jumped 7.6% to $2.15 billion, boosted by a 4.1% gain in same-store sales. The top-line results came in slightly lower than expected, as analysts were calling for a profit of 68 cents per share on $2.17 billion in sales. Looking ahead, FDO is projecting a second-quarter profit of $1.10 to $1.18 per share, and backed its forecast for a fiscal 2012 profit of $3.50 to $3.75 per share. By comparison, analysts are calling for second-quarter and full-year earnings to land squarely in the middle of those ranges at $1.14 and $3.65 per share, respectively. At last check, the shares of FDO are bracing for a 2.9% drop.

Xyratex (XRTX - 14.16) reported fourth-quarter earnings of $18.5 million, or 65 cents per share, down 43% from $32.3 million, or $1.02 per share, in the year-ago period. Excluding items, earnings came in at 73 cents per share, while revenue fell 2.3% to $387.6 million. The results topped expectations, as analysts were targeting a profit of 33 cents per share on revenue of $359.5 million. Looking ahead, XRTX is anticipating adjusted first-quarter earnings to range from 7 cents to 41 cents per share on revenue of $275 million to $355 million. For comparison, Wall Street is predicting a first-quarter profit of 17 cents per share on revenue of $318.4 million. The company noted that its "forecast ranges are wider than normal due to the uncertainty surrounding disk drive availability following the recent flooding in Thailand." In pre-market trading, XRTX is pointed modestly higher.

Finally, Ruby Tuesday (RT - 7.06) swung to a fiscal second-quarter loss of $2 million, or 3 cents per share, down from a year-ago profit of $4.6 million, or 7 cents per share. Despite a 4.2% drop in company-owned same-store sales, revenue rose 5.9% to $307.5 million. RT's results were mixed, as Wall Street had forecast a deeper loss of 5 cents per share on healthier revenue of $313 million. Looking ahead, the Maryville, Tenn.-based restaurateur believes its current-quarter profit will range between 12 cents and 16 cents per share, well below the average analyst estimate for per-share earnings of 27 cents. RT also slashed its full-year earnings forecast to a range between 55 cents and 65 cents per share, down from its previous outlook of 60 cents to 75 cents per share. Analysts are looking for a fiscal 2012 profit of 61 cents per share. Ahead of the bell, RT is set to open with a 4.5% deficit.

Earnings Preview

Today's earnings docket will also feature reports from AZZ ( AZZ ), Commercial Metals ( CMC ), Greenbrier Companies ( GBX ), PriceSmart ( PSMT ), and Robbins & Myers ( RBN ). Keep your browser at for more news as it breaks.

Economic Calendar

The week wraps up with the Labor Department's monthly report on nonfarm payrolls and the unemployment rate for December.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 997,825 call contracts traded on Thursday, compared to 621,148 put contracts. The resultant single-session put/call ratio arrived at 0.62, while the 21-day moving average was 0.71.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended mostly lower today, following in Wall Street's wobbly footsteps amid simmering euro-zone debt anxiety. Rising French bond yields ruined investors' risk appetites, and Japanese exporters sank as the yen gained ground against the embattled euro. However, equities eked out a win on the Chinese mainland, with the market recovering from the previous session's multi-year low. By the close, Hong Kong's Hang Seng and Japan's Nikkei lost 1.2% apiece, South Korea's Kospi gave back 1.1%, and China's Shanghai Composite rose 0.7%.

Conversely, the major European benchmarks are modestly higher at midday. After a pair of well-received U.S. employment reports on Thursday, traders seemed optimistic ahead of this morning's nonfarm payrolls release. Uncertainty continues to linger, though, with Italian and Spanish bond yields creeping higher ahead of next week's planned debt sales. At last look, the German DAX is up 0.4%, London's FTSE 100 is 0.6% higher, and the French CAC 40 has climbed 0.7%.

Overseas markets

Currencies and Commodities

The greenback is taking a breather this morning, with the U.S. dollar index down about 0.1%. Meanwhile, after dropping in the wake of a surprise uptick in supplies , crude oil futures have bounced back, with the front-month contract last seen 0.5% higher at $102.29 per barrel. Elsewhere, gold futures are set to extend their winning streak, with the malleable metal up 0.2% to flirt with $1,623.30 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing Options
Referenced Stocks: AZZ , CMC , GBX , PSMT , RBN

More from Schaeffer's Investment Research


Schaeffer's Investment Research

Schaeffer's Investment Research

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by