U.S. stocks are set to follow their European peers into the
black this morning. Relatively healthy debt auctions in both Spain
and Italy have eased jitters about the region's fiscal situation,
while unsurprising interest-rate decisions from the European
Central Bank (ECB) and the Bank of England (
BOE
) have also fueled the bulls. On the home front, meanwhile, traders
are awaiting data on jobless claims and retail sales, and digesting
the latest earnings predictions from Chevron (
CVX
) and Tractor Supply Company (
TSCO
), to name a few. At last check, the Dow Jones Industrial Average
(DJIA) is set to open with a 50-point lead, while the broader
S&P 500 Index (SPX) is poised to extend its
recent winning streak
.
In earnings news, Chevron (CVX - 107.77) last night warned that
weak margins and volumes in refining will likely push
fourth-quarter earnings "significantly" lower on a sequential
basis. Furthermore, the company said its Gulf Coast refining margin
fell "substantially," and its refined products output dropped by
180,000 barrels per day in the U.S. In addition, CVX said it
expects its fourth-quarter results -- slated to hit the Street on
Jan. 27 -- to include a foreign-exchange loss, versus a gain of
nearly $450 million in the third quarter. Ahead of the bell, CVX is
1.7% lower.
Meanwhile, Tractor Supply Company (TSCO - 72.93) forecast
stronger-than-expected fourth-quarter revenue, prompting the
agricultural concern to up its full-year earnings guidance.
Specifically, the firm projected net sales of $1.24 billion for the
fourth quarter -- up 20.1% from the year-ago period, and topping
analysts' estimates for revenue of $1.2 billion. As such, TSCO now
expects to earn $2.97 to $2.99 per share in 2011, compared to its
previous predictions for a per-share profit of $2.85 to $2.89. The
company's full quarterly and annual results are scheduled for
release on Feb.1. In pre-market trading, TSCO is poised to open
with a 5.5% gain.
Finally, DragonWave Inc. (DRWI - 3.76) said its fiscal
third-quarter loss widened to $8 million, or 23 cents per share,
compared to last year's loss of $42,000, or breakeven on a
per-share basis. Revenue was also on the decline, dropping to $11.8
million from $27 million in the year prior. Results for the
chipmaker came in lower than expected, as analysts were calling for
a slimmer loss of 18 cents per share on $13.6 million in sales.
Looking ahead, DRWI is forecasting fiscal fourth-quarter sales to
range from $12 million to $15 million. By comparison, analysts are
predicting a heftier revenue of $16.3 million. At last check, DRWI
is bracing for a 13.5% drop out of the gate.
Earnings Preview
Today's earnings docket will also feature reports from Essex
Property Trust (
ESS
), Infosys (
INFY
), and Washington Federal (WFSL). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The weekly update on jobless claims is scheduled for today,
accompanied by Commerce Department reports on business inventories
and December retail sales. The week wraps up with the mid-month
Thomson Reuters/University of Michigan consumer sentiment index,
plus the Labor Department's report on the trade deficit and
import/export prices.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,313,958 call contracts traded on Wednesday, compared
to 725,244 put contracts. The resultant single-session put/call
ratio arrived at 0.55, while the 21-day moving average was
0.68.
Overseas Trading
Stocks in Asia ended mostly lower today, as inflation data out
of China deflated expectations for easing monetary policy out of
Beijing. Specifically, the Chinese government said consumer prices
rose a year-over-year 4.1% in December, edging past analysts'
expectations for a 4% rise. In Japan, meanwhile, data showing a
steeper-than-anticipated drop in the country's current-account
surplus weighed on exporters. Against this backdrop -- and ahead of
the ECB's interest-rate decision -- Hong Kong's Hang Seng gave up
0.3%, the Shanghai Composite dipped about 0.1%, and Japan's Nikkei
fell 0.7%.
On the other hand, stocks in Europe are higher at midday, thanks
to strong bond auctions in Italy and Spain. Furthermore, investors
are digesting the latest monetary-policy decisions, with both the
ECB and the Bank of England opting to stand pat on interest rates.
At last look, the German DAX has added 1.5%, the French CAC 40 is
up 1.3%, and London's FTSE is 0.4% higher.
Currencies and Commodities
The greenback has given back some of its gains this morning,
with the U.S. dollar index down about 0.4%. Meanwhile, crude
futures have rebounded from
year-to-date lows
, with the front-month contract up 1.3% to linger near $102.41 per
barrel. Likewise, gold futures have continued their recent surge,
with the precious metal last seen 1.1% higher at $1,658.20 an
ounce.
Unusual Put and Call Activity:
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Education Center
topics on
Option Volume
and
Open Interest Configurations
.
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