Opening View: Futures Flat Ahead of Fed Minutes; HPQ, CPB in Focus

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The major market indexes are flirting with breakeven this morning, as Wall Street awaits Uncle Sam's latest third-quarter gross domestic product ( GDP ) estimates. Furthermore, traders are biding their time ahead of the Federal Open Market Committee's (FOMC) most recent meeting minutes, slated for release later this afternoon. In the meantime, traders are digesting the latest earnings from Hewlett-Packard ( HPQ ), some upbeat news about the U.S. credit ratings, and Congress' latest display of ineptitude -- though the supercommittee's admitted failure last night was seemingly already priced in to Monday's session . Against this backdrop, the Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) are trading modestly north of fair value, while the tech-rich Nasdaq Composite (COMP) is headed for a slight drop out of the gate.

Dow, S&P and Nasdaq futures

After the close last night, Hewlett-Packard (HPQ - 26.86) said its fiscal fourth-quarter profit fell 91% to $239 million, or 12 cents per share, from last year's profit of $2.54 billion, or $1.10 per share. On an adjusted basis, HPQ's earnings decreased to $1.17 from $1.33 per share. Revenue, meanwhile, decreased 3.5% to $32.3 billion. The tech giant's results were better than expected, as Wall Street was calling for a profit of $1.13 per share on $32.05 billion in revenue. Looking ahead, HPQ believes its adjusted current-quarter earnings will be between 83 cents and 86 cents per share, while its fiscal 2012 profit will be at least $4 per share. Analysts are anticipating first-quarter earnings of $1.11 per share, and a profit of $4.54 per share for the full year.


In other earnings news, Campbell Soup (CPB - 33.61) reported fiscal first-quarter earnings of $265 million, or 82 cents per share, compared to its year-ago earnings of $279 million, or 82 cents per share. Revenue dropped 1% to $2.16 billion. The results were mixed, as Wall Street was looking for a first-quarter profit of 79 cents per share on revenue of $2.21 billion. Looking ahead, the soup maker reiterated its fiscal 2012 guidance for adjusted earnings of $2.35 to $2.54 per share. Analysts, on average, are calling for a fiscal-year profit of $2.37 per share.

Elsewhere, Jack in the Box (JACK - 20.12) reported a fiscal fourth-quarter profit of $22.7 million, or 49 cents per share, up from $4 million, or 7 cents per share, in the year-ago period. Meanwhile, revenue fell by 10% to $504.2 million. Analysts, on average, were expecting a profit of 40 cents per share on revenue of $491.5 million. Looking ahead, JACK is predicting its adjusted fiscal 2012 earnings to range between 90 cents and $1.10 per share, falling short of Wall Street's forecast for a full-year profit of $1.68 per share. The restaurant chain expects overall commodity costs to rise by about 5% in 2012, with rising inflation applying notable pressure to first-half results.

Earnings Preview

Today's earnings docket will also feature reports from Chico's FAS ( CHS ), LDK Solar ( LDK ), Fred's ( FRED ), Hormel Foods (HRL), Patterson Companies (PDCO), Signet Jewelers (SIG), Nuance Communications (NUAN), and Pandora Media (P). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The government's latest GDP estimates will hit the Street today, as well as a report on business activity in the Richmond Fed district. Most notably, though, the FOMC meeting minutes are slated for release at 2 p.m. EST. On Wednesday, Uncle Sam will release its weekly jobless figures a day early, thanks to the Thanksgiving holiday on Thursday. In addition, Wall Street will digest the regularly scheduled crude inventories report, the final Thomson Reuters/University of Michigan consumer sentiment index for November, and monthly data on durable goods orders and personal incomes and spending. The post-holiday economic calendar is bare on Friday, when U.S. markets will shut down at 1 p.m. EST.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,026,042 call contracts traded on Monday, compared to 690,030 put contracts. The resultant single-session put/call ratio arrived at 0.67, while the 21-day moving average was 0.72.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

The major Asian benchmarks ended mixed today, as traders considered new debt drama out of the U.S. The congressional supercommittee's failure to reach an agreement to trim the federal deficit contributed to a broadly negative session on Wall Street Monday, but investors were somewhat relieved after both Moody's and Standard & Poor's dismissed speculation about a potential U.S. debt downgrade. In Japan, exporters caught a break as the yen cooled versus the dollar, but Chinese equities came under pressure after a central bank official predicted a possible trade deficit in 2012, due to ongoing economic weakness in the U.S. and Europe. By the close, Japan's Nikkei dipped 0.4%, China's Shanghai Composite slid 0.1%, Hong Kong's Hang Seng added 0.1%, and South Korea's Kospi rose 0.3%.

Stocks in Europe are modestly higher at midday, as traders seem relieved that a U.S. debt downgrade could be avoided. Among the three major ratings agencies, only Fitch noted that it may downwardly revise its outlook to negative as lawmakers on Capitol Hill remain at an impasse. However, traders tempered their enthusiasm after a Spanish bond auction saw yields rising to 14-year highs. At last check, London's FTSE 100 is up 0.4%, the French CAC 40 has added 0.5%, and the German DAX has gained 0.3%.

Overseas markets

Currencies and Commodities

The greenback has pulled back from multi-week highs today, with the U.S. dollar down 0.3%. On the other hand, crude futures have bounced back from their recent drubbing, with black gold last seen 1.3% higher at $98.15 per barrel. In the same vein, gold futures are also on the rebound, with the front-month contract up 1.1% to trade near $1,696.60 an ounce.

Currencies and commodities

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This article appears in: Investing , Options

Referenced Stocks: CHS , FRED , GDP , HPQ , LDK

Schaeffer's Investment Research

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