Opening View: Futures Mixed As Wall Street Digests Earnings, Anticipates Euro-Zone Summit


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U.S. stocks finished higher Monday on solid earnings reports, merger activity, and encouraging manufacturing data from China. However, futures are mixed this morning as investors anticipate the European Union's ( EU ) debt-crisis summit in Brussels on Wednesday. Meanwhile, on Wall Street, traders are responding to lackluster earnings guidance from the likes of tech giant Texas Instruments ( TXN ) and entertainment guru Netflix ( NFLX ), which are both set to start the day in negative territory. Against this backdrop, the Dow Jones Industrial Average (DJIA) is trading about 8.6 points south of fair value, while the S&P 500 Index (SPX) is poised to open just north of breakeven.

Dow, S&P and Nasdaq futures

In earnings news, United Parcel Service (UPS - 70.87) said its third-quarter profit jumped 14% to $1.04 billion, or $1.06 per share, from last year's earnings of $991 million, or 99 cents per share. Revenue increased 18% to $13.2 billion. UPS' results fell roughly in line with analysts' expectations for a profit of $1.05 per share on $13.17 billion in revenue. For fiscal 2011, UPS reaffirmed its forecast for adjusted earnings of $4.15 to $4.40 per share. Wall Street, on average, is looking for $4.23 per share in earnings.

Elsewhere, Netflix (NFLX - 118.84) reported a third-quarter profit of $62.5 million, or $1.16 per share, up 65% from last year's earnings of $38 million, or 70 cents per share. Revenue, meanwhile, rose 49% to $821.8 million. NFLX's results came in well above analysts' expectations for a profit of 94 cents per share on $811.6 million in revenue. For the current quarter, the streaming content provider predicted earnings of 36 cents to 70 cents per share on revenue of $841 million to $875 million. Analysts, on average, are looking for fourth-quarter earnings of $1.08 per share on $919.6 million in sales. Furthermore, the company warned of a first-quarter loss, thanks to its costly expansion into the U.K. and Ireland . At last check, NFLX is headed for a 36% plunge right out of the gate.

Texas Instruments (TXN - 31.69) said its third-quarter earnings fell to $601 million, or 51 cents per share, from $859 million, or 71 cents per share, a year earlier. Revenue, meanwhile, dipped to $3.5 billion from $3.7 billion. The results were mixed, as analysts were calling for a per-share profit of 58 cents on sales of $3.3 billion. Looking ahead, TXN projected current-quarter earnings in a range of 28 to 36 cents per share on revenue of $3.26 billion to $3.54 billion. Wall Street, on the other hand, is calling for a much healthier per-share profit of 54 cents on sales of $3.35 billion. Ahead of the bell, TXN is bracing for a 1.6% dip.

Shortly after the bell sounded last night, Amgen (AMGN - 58.95) said its third-quarter profit fell 63% to $454 million, or 50 cents per share, from its year-ago earnings of $1.24 billion, or $1.28 per share. Excluding items, earnings increased 3% to $3.9 billion, or $1.40 per share. Revenue, meanwhile, rose 3.4% to $3.94 billion. The results came in above analysts' expectations for adjusted earnings of $1.29 per share on $3.88 billion in revenue. Looking ahead, AMGN upwardly revised its full-year guidance, and is now expecting adjusted earnings of $5.15 to $5.30 per share on revenue of $15.1 billion to $15.5 billion. Analysts, on average, are anticipating a full-year profit of $5.21 per share on sales of $15.44 billion.

Finally, Veeco Instruments (VECO - 27.05) reported a third-quarter profit of $35.9 million, or 90 cents per share, down from $86.2 million, or $2.04 per share, in the year-ago period. Excluding items, VECO's earnings dropped to $1.33 from $1.46 per share. Meanwhile, revenue fell to $268.0 million from $277.1 million in the year prior. Analysts, on average, had expected an adjusted profit of $1.13 per share on revenue of $253.5 million. For the fourth quarter, VECO forecast adjusted per-share earnings in a range between 54 cents and 86 cents on revenue of $175 million to $215 million. For the full year, the company is expecting adjusted per-share earnings between $4.81 and $5.11 on revenue of $963 million to $1.0 billion. Wall Street is predicting a fourth-quarter profit of $1.05 per share on revenue of $238 million, and a fiscal-year profit of $4.82 per share on revenue of $1.01 billion. VECO is fractionally lower ahead of the open.

Earnings Preview

Today's earnings docket will also feature reports from DuPont ( DD ), 3M Company ( MMM ), AK Steel Holding (AKS), ARM Holdings (ARMH), Broadcom (BRCM), BP plc (BP), CIT Group (CIT), Coach (COH), Delta Air Lines (DAL), Express Scripts (ESRX), F5 Networks (FFIV), Human Genome Sciences (HGSI), Panera Bread (PNRA), Office Depot (ODP), Range Resources (RRC), Regions Financial (RF), Under Armour (UA), UBS AG (UBS), and Xerox (XRX). Keep your browser at for more news as it breaks.

Economic Calendar

The economic calendar kicks off today with the release of the Conference Board's consumer confidence index, as well as housing data from both S&P/Case-Shiller and the Federal Housing Finance Agency (FHFA). On Wednesday, the Census Bureau will unveil its latest figures on new home sales and durable goods, while the Energy Information Administration (EIA) will release its regularly scheduled report on crude stockpiles. Thursday will bring us the latest gross domestic product (GDP) estimates, as well as the weekly jobless data from the Labor Department. The economic agenda will wrap up on Friday with personal income and spending figures for September, the government's third-quarter employment cost index, and the final Thomson Reuters/University of Michigan consumer sentiment index for October.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,228,143 call contracts traded on Monday, compared to 643,691 put contracts. The resultant single-session put/call ratio arrived at 0.52, while the 21-day moving average was 0.68.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets ended mixed today, as traders curbed some of their enthusiasm ahead of tomorrow's much-anticipated announcement from euro-zone leaders. However, resource and commodity stocks continued to benefit from China's upbeat manufacturing data, helping Hong Kong's benchmark to a positive finish. Meanwhile, Canon shares will likely be active in Tokyo tomorrow, as the company slashed its full-year forecast after the end of the regular session -- due, in part, to heavy flooding in Thailand. By the close, China's Shanghai Composite climbed 1.7%, Hong Kong's Hang Seng added 1.1%, Japan's Nikkei fell 0.9%, and South Korea's Kospi declined 0.5%.

European indexes are sticking close to the breakeven line at midday, with investors on pins and needles as European Union ( EU ) officials attempt to hammer out a comprehensive plan to address the region's debt crisis. On the earnings front, STMicroelectronics was pummeled in Paris after providing a downbeat fourth-quarter forecast, while banking issues UBS and Deutsche Bank both sounded a cautious note on future earnings. Elsewhere, energy stocks BG and BP both surprised to the upside in their respective quarterly reports. At last check, the German DAX is up 1.5%, London's FTSE 100 has added 0.2%, and the French CAC 40 is down 0.2%.

Overseas markets

Currencies and Commodities

Currencies and commodities

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This article appears in: Investing Options
Referenced Stocks: DD , EU , MMM , NFLX , TXN

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