Federal Reserve Chairman Ben Bernanke's highly anticipated
speech on Wednesday provided little comfort for investors, as he
simply highlighted the fact that the recovery is proceeding at a
snails' pace. Meanwhile, the Fed trimmed its 2011 and 2012 growth
estimates for the U.S. economy, and also pushed its core inflation
forecasts higher. Against this backdrop, all three major market
indexes suffered substantial losses -- and the forecast doesn't
look much better today. Futures on the Dow Jones Industrial Average
(DJIA ) are trading over 67 points lower, while S&P 500 Index
(SPX ) futures are down 9.4 points. On the calendar for today are
weekly jobless claims data, followed by figures on sales of new
Bed Bath & Beyond (BBBY - 54.06) reported a first-quarter
profit of $180.6 million, or 72 cents per share, up 31% from its
year-ago earnings of $137.6 million, or 52 cents per share. Revenue
for the period improved 9.7% to $2.11 billion, boosted by a 7% rise
in same-store sales. The results exceeded analysts' expectations,
which called for a profit of 62 cents per share on $2.08 billion in
revenue. BBBY also upped its full-year forecast, with the retailer
now predicting a 15% to 20% rise in earnings per share for fiscal
2011. Previously, the company expected full-year earnings growth of
10% to 15%. BBBY is up 2.6% in pre-market trading.
Red Hat (RHT - 43.72) announced that its first-quarter profit
climbed 35% to $32.5 million, or 17 cents per share, while revenue
surged 27% to $264.7 million. On an adjusted basis, RHT raked in 24
cents per share, compared to 18 cents in the year-ago period. Wall
Street, by contrast, was expecting a profit of 22 cents per share
on $254 million in revenue.
Lennar Corporation (LEN - 18.10) said this morning that its
fiscal second-quarter net profit dropped 65% to $13.8 million, or 7
cents per share, from $39.7 million, or 21 cents a share, in the
year-ago period. Meanwhile, revenue fell 6% to $764.5 million.
Analysts, on average, had expected LEN to report a slimmer profit
of 4 cents per share on $646.3 million in revenue. The homebuilding
firm said the results were driven by a 9% drop in new home
deliveries, along with a 2.3% decrease in operating margin. CEO
Stuart Miller said Lennar's year-on-year comparisons should only
improve, since the housing tax credit ended in May 2010. Ahead of
the open, LEN is down 0.6%.
Pfizer Inc. (PFE - 20.28) scored a key victory on Wednesday.
After the close, the drug diva, along with sector peer
Bristol-Myers Squibb Co. (BMY - 27.74) announced results of the
late-stage trial of the blood thinner Eliquis. In a study of
patients with an abnormal heart rhythm and at least one additional
risk factor for stroke, Eliquis met efficacy goals compared to the
drug warfarin, reported PFE. Analysts believe that this new drug
could become a major competitor to similar medications from Johnson
& Johnson and Bayer AG. Ahead of the open, PFE has added nearly
Today's earnings docket will feature reports from Accenture (
), ConAgra (
), Discover Financial Services (
), H&R Block (
), Oracle (
), Rite Aid (RAD), and Tibco Software (TIBX). Keep your browser at
for more news as it breaks.
Today's calendar includes initial and continuing jobless claims,
as well as new home sales for May. The week wraps up with a bang,
as Friday promises the latest revision to first-quarter gross
domestic product (GDP) and durable goods orders for May.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 896,303 call contracts traded on Wednesday, compared to
471,989 put contracts. The resultant single-session put/call ratio
docked at 0.53, while the 21-day moving average was perched at
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Markets in Asia ended mostly lower today, as traders took their
cues from Wall Street's red ink-soaked finish. However,
Shanghai-listed stocks powered higher after data from HSBC showed a
slowdown in manufacturing activity during the month of June,
suggesting that the central bank may take a break from its
relentless policy-tightening mission. In the wake of this data,
banks and property developers helped pace the advance on the
mainland. By the close, China's Shanghai Composite was up 1.5%,
Hong Kong's Hang Seng lost 0.5%, South Korea's Kospi shed 0.4%, and
Japan's Nikkei declined 0.3%.
European stocks are trading south of breakeven at midday,
pressured by the Fed's downwardly revised U.S. growth outlook and a
weaker-than-forecast purchasing managers index (PMI) for the
euro-zone region. In particular, banking issues continue to
struggle amid the atmosphere of rising risk aversion, with BNP
Paribas, Credit Agricole, and Societe Generale each losing about 2%
in Paris. At last check, the French CAC 40 is down 1.3%, the German
DAX is off 1.1%, and London's FTSE 100 is 1.1% lower.
Currencies and Commodities
The dollar has continued to climb this morning, fueled by
worries over the health of the economy. Bernanke's speech on
Tuesday simply highlighted what most already know: the global
recovery is proceeding very, very slowly, and there continues to be
economic trouble in Europe. As a result, the dollar has gained
against its rivals, adding 0.6 point, or 0.8%, ahead of the open.
Meanwhile, crude oil has continued to sink, surrendering 2.1
points, or 2.2%, to trade just above $93 per barrel. Gold, too, has
swallowed losses this morning, shedding 13.6 points, or 0.9%.
Unusual Put and Call Activity:
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