Opening View: DJIA, SPX Ripe for Rebound as 3M, Ford Motor Shine in the Earnings Spotlight


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After starting the week with modest losses on Monday, stocks appear ready to battle back into the black this morning. Fueling the bulls' early momentum has been a stronger-than-anticipated earnings showing from blue chip 3M Company (MMM), as well as a celebrated quarterly report from car concern Ford Motor ( F ). However, the start of the Federal Open Market Committee's (FOMC) two-day summit is keeping the pre-market optimism in check, as buyers assume a cautious stance before Ben Bernanke's date with the podium tomorrow. Ahead of the bell, the Dow Jones Industrial Average (DJIA ) is trading about 33 points above fair value, while the broader S&P 500 Index (SPX ) is flirting with a 4-point gain.

Dow, S&P and Nasdaq futures

In equities news, 3M Company (MMM - 94.12) reported first-quarter earnings of $1.08 billion, or $1.49 per share, up from a profit of $930 million, or $1.29 per share, in the year-ago quarter. Revenue, meanwhile, jumped 15% to a record $7.31 billion. Analysts, on average, were expecting a first-quarter profit of $1.44 per share on sales of $6.95 billion. What's more, the blue chip upped its full-year earnings forecast to $6.27 to $6.47 per share, excluding items, compared to its previous guidance for a per-share profit between $5.95 and $6.20. Ahead of the bell, MMM has advanced 1.4%.

Elsewhere, Ford Motor (F - 15.54) banked a first-quarter profit of $2.55 billion, or 61 cents per share, modestly improved from its year-ago earnings of $2.09 billion, or 50 cents per share. Excluding items, Ford earned 62 cents per share, while revenue arrived at $33.1 billion. Analysts, on average, were looking for a profit of 50 cents per share on revenue of $29.70 billion. Chief Financial Officer Lewis Booth estimated that Ford has lost 12,000 to 14,000 units of production in Asia due to the Japan disaster, but the automaker's North American operations have not been materially affected. At last check, F is set to open about 3.5% higher.

Meanwhile, Netflix, Inc. (NFLX - 251.67) reported a first-quarter profit of $60.2 million, or $1.11 per share -- up 87% from its year-ago net income of $32.3 million, or 59 cents per share. Revenue for the quarter surged 46% to $719 million. Both numbers exceeded analysts' expectations, which called for a profit of $1.08 per share on $703.6 million in revenue. However, NFLX's second-quarter forecast wasn't so warmly received. The company predicted a profit of 93 cents to $1.15 per share on revenue of $778 million to $798 million, compared to Wall Street's forecast for earnings of $1.19 per share on $763 million in revenue. In pre-market trading, NFLX has surrendered about 5.5%.

Finally, Oracle Corp. (ORCL - 34.83) has also made headlines, after the firm last night announced that its chief financial officer has resigned. The company offered no reason for Jeff Epstein's departure, but said he'll immediately be succeeded by Safra Catz, who's been a president at Oracle since 2004. Ahead of the bell, the shares of ORCL have tacked on 0.2%.

Earnings Preview

Today's earnings docket will feature reports from Coca-Cola (KO), Altera Corp. ( ALTR ), Delta Air Lines ( DAL ), Panera Bread (PNRA), United Parcel Service (UPS), and Under Armour (UA), just to name a few. Keep your browser at for more news as it breaks.

Economic Calendar

The economic calendar will feature the S&P/Case-Shiller home-price index, as well as the latest consumer confidence data from the Conference Board. On Wednesday, we'll hear reports on durable orders for March, as well as the regularly scheduled crude inventories report, with the Federal Open Market Committee (FOMC) -- and a press briefing from Federal Reserve Chairman Ben Bernanke -- set to take center stage around midday. Thursday heats up with first-quarter gross domestic product ( GDP ) figures, weekly jobless claims, and data on pending home sales for March. Finally, the week ends with a bang on Friday, with reports on personal income and spending, the Chicago purchasing managers index (PMI), and the Reuters/University of Michigan consumer sentiment index on tap.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 983,403 call contracts -- the fewest of 2011 -- traded on Monday, compared to 571,565 put contracts. The resultant single-session put/call ratio docked at 0.58, while the 21-day moving average remained at 0.59.

NYSE and Nasdaq summary

Volatility indices

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Overseas Trading

Asian stocks finished lower today, as buyers sat on the sidelines ahead of the U.S. central bank's policy meeting. Along with commodities-related stocks, Nintendo Co. led the laggards in Tokyo, falling in the wake of a disappointing earnings showing. Meanwhile, Standard & Poor's Ratings Services cut its outlook on six Japanese automakers -- including Toyota Motor (TM) and Honda Motor (HMC) -- to "negative," citing production cuts from the March 10 earthquake and tsunami. By the close, Japan's Nikkei gave up almost 1.2%, the Shanghai Composite fell 0.9%, and Hong Kong's Hang Seng surrendered 0.5%.

In Europe, stocks have reversed early losses to trade higher, thanks in part to stronger-than-anticipated earnings from Swiss financial firm UBS AG. In addition, traders were celebrating France's Groupe Lactalis' offer to buy the remaining stake in Italian dairy group Parlamat, as well as news that Aegon will sell its Transamerica Reinsurance unit to French insurance issue Scor SE. At last check, London's FTSE 100 has added 0.3%, France's CAC 40 has tacked on nearly 0.3%, and Germany's DAX has advanced 0.4%.

Overseas markets

Currencies and Commodities

The greenback has continued its decline this morning, with the U.S. dollar index down almost 0.2%. Elsewhere, crude futures have extended Monday's modest retreat. At last check, the June-dated contract has given up 0.2% to flirt with $112.05 per barrel. Meanwhile, gold futures have pulled back from record highs, but remain above the $1,500-an-ounce marker. In pre-market action, the front-month contract has surrendered 0.4% to trade at $1,502.70 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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Unusual options activity - puts

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This article appears in: Investing , Options
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