Volatility has been the name of the game this week, with the Dow
trading in a range of several hundred points since last Friday's
devastating blow from Standard & Poor's. Speaking to this,
futures are mixed this morning, as traders regroup from the
previous session's massive sell-off. On one hand, some investors
have their rose-colored glasses on, and are cheering what could
only be described as a mixed earnings showing from Dow
underperformer Cisco Systems (CSCO - 13.73). On the other hand,
lingering concerns about a potential debt downgrade for France have
limited any pre-market optimism.
Jumping right in... CSCO reported a fiscal fourth-quarter profit
of $1.23 billion, or 22 cents per share, down 36% from its year-ago
earnings of $1.94 billion, or 33 cents per share. On an adjusted
basis, earnings arrived at 40 cents per share, while revenue edged
up 3.3% to $11.2 billion. The results narrowly surpassed analysts'
expectations, which called for a profit of 38 cents per share on
$10.97 billion in revenue. Looking ahead, Cisco predicted
first-quarter earnings of 38 cents to 41 cents per share on sales
growth of 1% to 4%, well short of Wall Street's forecast for
earnings of 44 cents per share on 7% higher sales. However, it
seems the Street has taken a glass-half-full approach to CSCO's
mixed report, with the shares up over 10% ahead of the open.
News of the World
Retail bigwig Kohl's Corporation (KSS - 44.29) reported that its
second-quarter earnings rose 16.5% to $303 million, or $1.09 per
share, from $260 million, or 84 cents per share, a year ago.
Meanwhile, revenue increased to $4.25 billion from $4.1 billion.
Wall Street analysts had expected Kohl's to earn $1.08 per share on
revenue of $4.25 billion. The department store diva lifted its 2011
earnings forecast to between $4.45 and $4.60 per share, from its
previous forecast for earnings between $4.25 and $4.40 per share.
Kohl's also said it expects same-store sales to be up between 2%
and 4% in the next quarter.
Finally, AOL, Inc. (AOL - 10.22) announced this morning that its
board of directors has approved a $250 million stock repurchase
program, effective Aug. 10. "We are continuing the disciplined
execution of our strategy and have confidence in our future growth
prospects," wrote Chairman and CEO Tim Armstrong in a statement.
This announcement comes just after a particularly disappointing
earnings report earlier this week, when the company lowered its
outlook on slowing sales.
Today's earnings docket will feature reports from Brinker
), Red Robin Gourmet Burgers (
), Wendy's Co. (
), Sara Lee (
), SodaStream International (
), DeVry (DV), eDiets.com (DIET), Nvidia (NVDA), Renren (RENN),
Emulex (ELX), Bally Technologies (BYI), Hoku Corp. (HOKU),
Nordstrom (JWN), Molycorp (MCP), Teekay Corp. (TK), and Teekay
Tankers (TNK). Keep your browser at
for more news as it breaks.
Initial and continuing jobless claims are due out today, along
with June's trade balance. The economic calendar concludes on
Friday with the release of retail sales for July, June's business
inventories, and the preliminary Reuters/University of Michigan
consumer sentiment index for August.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,316,596 call contracts traded on Wednesday, compared
to 1,072,809 put contracts. The resultant single-session put/call
ratio arrived at 0.81, while the 21-day moving average was
The summer 2011 issue of
magazine is now available here.
Asian markets ended mixed today, as economic anxiety was
partially offset by bargain-hunting. In Tokyo, a stronger yen kept
exporters under pressure, while weakness in banking giant HSBC
dragged on stocks in Hong Kong. Seoul-listed securities gained
ground for the second day in a row, as a wave of institutional
buying helped to erase early losses. Meanwhile, in China, a round
of equity purchases by the National Social Security Fund
contributed to a positive session. By the close, Hong Kong's Hang
Seng lost about 1%, Japan's Nikkei fell 0.6%, South Korea's Kospi
rose 0.6%, and China's Shanghai Composite added 1.3%.
French banks are weighing on investor sentiment in Europe, where
stocks are trading south of breakeven at midday. Concerns about a
potential debt downgrade, as well as rumors about potential trouble
at Societe Generale, have triggered a fresh wave of selling, with
financials leading the laggards. At last check, the French CAC 40
is down 3.3%, the German DAX is off 1.7%, and London's FTSE 100 is
Currencies and Commodities
After Wednesday's massive sell-off, the U.S. dollar index has
edged slightly higher this morning, adding 0.05 point, or 0.1%.
Meanwhile, oil is fractionally lower in pre-market trading,
backpedaling 0.03 point, or 0.04%. Gold has also taken a break this
morning, after the precious metal's exponential ascent during the
past few sessions. Ahead of the open, gold futures have dropped 1.7
points, or 0.1%.
Unusual Put and Call Activity:
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