Opening View: Futures Point to Lower Open as Imports in Spotlight

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Stocks snapped their six-day losing streak on Thursday, as traders reacted to a decline in the U.S. trade deficit. After Federal Reserve Chairman Ben Bernanke's downbeat speech on Tuesday, investors celebrated news of a narrower trade gap, which seemed to quell concerns over the health of the global economy. However, this optimism seems short lived, with futures on all three major indexes trading lower as the Street awaits today's report on U.S. import prices. Specifically, futures on the Dow Jones Industrial Average (DJIA ) are trading roughly 25 points below fair value, while S&P 500 Index (SPX ) futures are hovering 3.5 points below fair value.

Dow, S&P and Nasdaq futures

Lululemon Athletica inc. (LULU - 86.14) reported this morning that its first-quarter revenue rose 35% to $186.8 million, blowing past analysts' prediction for revenue of $181.2 million. Earnings for the quarter arrived at 46 cents per share, comfortably above the consensus estimate. The retailer also gave an upbeat outlook for the second quarter, saying it expected to see profits between 42 and 44 cents per share on revenue of $200 to $205 million. Both of these projections were easily above the upper end of analysts' projections -- and as a result, LULU is up over 2% in premarket trading.

National Semiconductor (NSM -24.68) reported a fiscal fourth-quarter profit of $67.1 million, or 26 cents per share, down from its year-ago earnings of $79.2 million, or 33 cents per share. Revenue for the quarter declined 6.1% to $374 million. Analysts, on average, were anticipating a profit of 27 cents per share on revenue of $365.1 million. The latest quarter included roughly $14 million in expenses related to the company's planned acquisition by Texas Instruments ( TXN ), which has yet to be approved by NSM shareholders.

Altria Group (MO - 27.46) announced that it will take a one-time charge of roughly $630 million during the second quarter, after the IRS disallowed tax benefits related to leveraged lease transactions from 1996 through 2003. As a result, MO lowered its full-year diluted earnings forecast to a range between $1.70 and $1.76 per share, down from its prior view of $2.00 to $2.06 per share. However, MO backed its guidance for adjusted 2011 earnings of $2.01 to $2.07 per share.

Nokia Corp. (NOK - 6.29) continues to dominate headlines this morning, as rumors swirl over a potential joint venture for the Finnish telecom company. In fact, NOK said today that it's currently talking to several bidders about potential offers for its Nokia Siemens Networks collaboration with Siemens AG. "As we have said earlier, there has been unsolicited interest in NSN and we continue to be in constructive talks with multiple parties," a Nokia spokesperson told MarketWatch . Ahead of the open, NOK is down 0.2%, at $6.29.

Finally, Toyota Motor Company (TM - 81.92) warned that it could see smaller profits for the current fiscal year, due to the effects of the March disasters. TM reported its full-year figures last month, but delayed any announcements regarding its outlook. The Japanese automaker's supply and sales had been hurt by the earthquake and tsunami that happened earlier this year.

Earnings Preview

Today's earnings docket will feature a report from AEP Industries ( AEPI ). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The government's monthly import and export figures are due out today.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 828,266 call contracts traded on Thursday, compared to 647,247 put contracts. The resultant single-session put/call ratio docked at 0.78, while the 21-day moving average was perched at 0.70.

NYSE and Nasdaq summary

Volatility indices

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Overseas Trading

Asian stocks ended mixed today, as traders weighed softening economic data out of China against a rebound on Wall Street. Specifically, Chinese exports rose 19.4% in May on a year-over-year basis, down substantially from the 29.9% growth recorded in April. The slower growth may not stop the central bank from tightening policy yet again, and many traders exercised caution ahead of inflation data due out next week. Meanwhile, the Bank of Korea unexpectedly upped its benchmark rate by a quarter-point to 3.25%. In Hong Kong, stocks suffered their seventh straight losing session, while Japanese shares followed suit with their U.S. counterparts, paring much of their intraday gains by the close. Japan's Nikkei added 0.5%, China's Shanghai Composite tacked on 0.07%, Hong Kong's Hang Seng lost 0.8%, and South Korea's Kospi tumbled 1.2%.

Stocks in Europe have wobbled lower at midday, with Peugeot pacing a decline in auto stocks on concerns that the company may shutter a French production facility. However, news that Greece's Cabinet has approved new austerity measures is keeping losses to a minimum, particularly after the German parliament passed a resolution to approve additional aid for the debt-strapped country. At last check, the German DAX is down about 0.2%, London's FTSE 100 had added 0.8.%, and the French CAC 40 is off 0.6%.

Overseas markets

Currencies and Commodities

Crude futures have slipped this morning, effectively snapping a three-day rally inspired by this week's news from the Organization of Petroleum Exporting Countries. On Wednesday, OPEC announced that it would be leaving output quotas unchanged, fueling concerns about supply. Ahead of the open, crude oil futures were trading 0.92 points, or 0.9%, lower, at $101.01 per barrel. Meanwhile, gold was in the headlines this morning, as UBS upped its three-month gold forecast to $1,600 an ounce. The brokerage firm cited the struggling economy for their raised outlook. "Weakness in global data is fostering more optimism on gold in the second half of this year and any downside moves should be limited given concerns about the economic picture," wrote UBS analyst Edel Tully. Nevertheless, gold futures have backpedaled slightly in pre-market trading, down 0.1 point, or 0.01%. Finally, ahead of the open, the U.S. dollar index has added 0.22 point, or 0.29%.

Currencies and commodities

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

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This article appears in: Investing , Options

Referenced Stocks: AEPI , CBOE , LULU , TXN

Schaeffer's Investment Research

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