After rebounding to notch a
triple-digit win
on Tuesday, the Dow Jones Industrial Average (DJIA) is trading
closer to breakeven this morning. On one hand, optimists are
clinging to hope that
unconfirmed reports
of a euro-zone rescue agreement between France and Germany are
real, and are essentially shrugging off Moody's downgrade of
Spain's government bond ratings. However, a rare earnings miss from
tech titan Apple Inc. (
AAPL
) has deflated more than a few bulls, and has pressured the
tech-rich Nasdaq Composite (COMP) modestly lower ahead of the bell.
Against this backdrop -- and with a plethora of additional earnings
reports and economic data slated for release -- the major market
indexes are set to take diverging paths out of the gate.
As previously mentioned, Apple Inc. (AAPL - 422.24) last night
reported weaker-than-anticipated fiscal fourth-quarter earnings,
despite significant jumps in iPad and Mac sales. Specifically, the
iPhone maker said quarterly earnings rose a year-over-year 54% to
$6.62 billion, or $7.05 per share, while sales increased 39% to
$28.27 billion. Analysts, on average, were expecting fourth-quarter
earnings of $7.39 per share on revenue of $29.69 billion. Looking
ahead, the tech titan said it expects fiscal first-quarter earnings
of about $9.30 per share on revenue of $37 billion, compared to
analysts' projections for a per-share profit of $9.01 on sales of
$36.72 billion. At last check, AAPL is flirting with a 5% drop at
the open.
Elsewhere in earnings news, Intel (INTC - 23.40) reported a
stronger-than-expected third-quarter profit of $3.47 billion, or 65
cents per share, up 17% from its year-ago earnings of $2.96
billion, or 52 cents per share. On an adjusted basis, the tech
company said it earned 69 cents per share. Meanwhile, net revenue
for the quarter climbed 28% to $14.3 billion. Analysts were
expecting INTC to report earnings of 61 cents per share on revenue
of $13.9 billion. For the fourth quarter, INTC forecast revenue of
$14.2 billion to $15.2 billion, while the Street is predicting
sales of $14.23 billion. Ahead of the bell, INTC is set to open
3.7% higher.
Juniper Networks (JNPR - 21.41) reported a third-quarter profit
of $83.7 million, or 16 cents per share - down 38% from its
year-ago profit of $134.5 million, or 25 cents per share. On an
adjusted basis, JNPR earned 28 cents per share, while revenue rose
9.2% year-over-year to $1.11 billion. The results fell just shy of
bottom-line expectations, as analysts had projected earnings of 28
cents per share on sales of $1.09 billion. Looking ahead, the
company forecast fourth-quarter earnings of 32 cents to 36 cents
per share on revenue of $1.16 billion to $1.22 billion. Analysts,
on average, are calling for a fourth-quarter profit of 36 cents per
share on sales of $1.23 billion. In pre-market trading, JNPR has
given up 2.1%.
Finally, Yahoo (YHOO - 15.47) reported a third-quarter profit of
$293.3 million, or 23 cents per share, down 26% from $396.1
million, or 29 cents per share, in the year-ago period. Excluding
items, YHOO's profit arrived at 21 cents per share, which was a 32%
increase over last year's adjusted earnings of 16 cents per share.
Analysts had expected an adjusted profit of 17 cents per share.
Meanwhile, net revenue declined 5% to $1.07 billion, right in line
with Wall Street's expectations. Looking ahead, the company is
expecting fourth-quarter net revenue to range between $1.13 billion
and $1.24 billion, while analysts are forecasting revenue of $1.22
billion. At last check, YHOO is headed for a 4.2% lead out of the
gate.
Earnings Preview
Today's earnings docket will also feature reports from American
Express (
AXP
), AMR Corp. (
AMR
), Amylin Pharmaceuticals (
AMLN
), Apollo Group (
APOL
), Bank of New York Mellon (BK), BlackRock (BLK), Buffalo Wild
Wings (BWLD), Cheesecake Factory (CAKE), Cirrus Logic (CRUS),
E*Trade Financial (ETFC), eBay (EBAY), Freeport McMoRan Copper
& Gold (FCX), Morgan Stanley (MS), PNC Financial Services
(PNC), Riverbed Technology (RVBD), SLM Corp. (SLM), Travelers
Companies (TRV), United Technologies (UTX), U.S. Bancorp (USB), and
Western Digital (WDC) . Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
Today's docket features the consumer price index (CPI) and core
CPI for September, along with last month's housing starts, weekly
crude inventories, and the Fed's Beige Book report for October. The
usual report on weekly jobless claims is due out Thursday, as well
as existing home sales for September, the October Philadelphia Fed
index, and the Conference Board's index of leading economic
indicators. There are no major economic reports scheduled for
Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,059,472 call contracts traded on Tuesday, compared to
662,125 put contracts. The resultant single-session put/call ratio
arrived at 0.62, while the 21-day moving average was 0.71.
Overseas Trading
Stocks in Asia ended mostly higher today, boosted by reports
that euro-zone leaders have reached a deal to expand the size of
the European Financial Stability Facility (EFSF). Later in the
session, investors' enthusiasm was tempered by conflicting reports
that no such decision has yet been reached. Meanwhile, the tech
sector struggled amid ongoing flooding at Thai manufacturing
facilities, as well as poorly received earnings from Apple.
Nevertheless, most regional benchmarks finished in the black,
bouncing back from Tuesday's losses. By the close, Hong Kong's Hang
Seng added 1.3%, South Korea's Kospi rose 0.9%, Japan's Nikkei
gained 0.4%, and China's Shanghai Composite slipped 0.3%.
European markets are on the upswing at midday, with traders
relatively unruffled by a Moody's downgrade of Spanish debt.
Although more than one European Union (EU) official has dismissed
speculation that a deal to bolster the EFSF has been reached, hopes
seem to be running high that additional aid measures will be
implemented at this weekend's summit of EU leaders. As a result,
banking stocks are helping to lead the advance. At last check, the
German DAX is up 0.7%, while both London's FTSE 100 and the French
CAC 40 have tacked on 0.8%.
Currencies and Commodities
The greenback has given up some ground this morning, with the
U.S. dollar index down 0.6% at last look. Elsewhere, crude futures
have extended their
journey north of $88 per barrel
, with the front-month contract tacking on 0.5% ahead of the bell.
On the flip side, gold futures are on the rebound after
surrendering 1.4% yesterday
, with the malleable metal last seen fractionally higher at $1,653
an ounce.
Unusual Put and Call Activity:
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