This week started off with a thud. After digesting Friday
night's U.S. credit rating downgrade from Standard & Poor's,
the Dow Jones Industrial Average (DJIA ) suffered its worst loss
since December 2008, surrendering over 600 points by the close.
However, it's a new day -- and futures on all three major indexes
are pointing higher (but given Monday's steep losses, this
morning's rebound isn't all that surprising). This positive price
action comes ahead of the Federal Open Market Committee's latest
decision on monetary policy, scheduled for 2:15 p.m. Eastern. While
the Fed's been noncommittal about additional monetary easing,
Friday's downgrade has spurred hopes that additional assistance
from the government could, perhaps, be on the horizon.
On the earnings front, MGM Resorts International (MGM - 11.54)
reported a second-quarter profit of $3.44 billion, or $6.22 per
share, reversing a year-ago loss of $883 million, or $2 per share.
Excluding a $3.5-billion benefit from the initial public offering
of MGM China, the casino concern recorded a loss of 8 cents per
share -- much narrower than the 13-cents per-share loss expected on
the Street. Meanwhile, net revenue for the quarter jumped 17% to
$1.81 billion, topping analysts' estimates for sales of $1.59
billion. Ahead of the open, MGM is up 2.5%.
Take-Two Interactive Software (TTWO - 11.07) reported a fiscal
first-quarter loss of $8.7 million, or 11 cents per share.
Excluding items, the firm said it earned 2 cents per share on
revenue of $334.4 million -- falling woefully short of analysts'
expectations for earnings of 9 cents per share on sales of $351.2
million. The company attributed the relatively weak quarter to a
lackluster response to its
Duke Nukem Forever
game, and predicted fiscal second-quarter revenue in a range of $70
million to $85 million -- less than half the consensus forecast for
current-quarter sales of $195 million.
DISH Network Corp. (DISH - 22.64) said that its second-quarter
profit rose 30% to $335 million, or 75 cents per share, from $257
million, or 57 cents per share, a year ago. Meanwhile, revenue for
the quarter jumped 13% to $3.59 billion. Analysts had expected
DISH's quarterly earnings to arrive at 79 cents per share on
revenue of $3.38 billion. The satellite TV titan confessed that net
subscribers fell by 135,000 to 14.056 million during the quarter,
due to increased competitive pressures.
Today's earnings docket will feature reports from Walt Disney (
), AOL (
), Demand Media (
), Capstone Turbine (
), Carrizo Oil & Gas (
), Fuel Systems Solutions (FSYS), Harbin Electric (HRBN), James
River Coal (JRCC), ReneSola (SOL), SunPower (SPWRA), Arena
Pharmaceuticals (ARNA), Myriad Genetics (MYGN), Beazer Homes (BZH),
Cree (CREE), EchoStar (SATS), Fossil (FOSL), and Orbitz Worldwide
(OWW). Keep your browser at
for more news as it breaks.
Today's docket features a report on second-quarter productivity
and labor costs from the Bureau of Labor Statistics (BLS), along
with the aforementioned FOMC statement. On Wednesday, we'll hear
reports on wholesale inventories for June, the July Treasury
budget, and weekly petroleum inventories. Initial and continuing
jobless claims are due out on Thursday, 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
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,626,572 call contracts traded on Monday, compared to
1,757,508 put contracts. The resultant single-session put/call
ratio arrived at 1.08, while the 21-day moving average was
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magazine is now available here.
Stocks in Asia ended lower across the board, as traders took
their cues from Wall Street's no-holds-barred sell-off. Energy and
commodity stocks, such as Aluminum Corp. of China and Cnooc Ltd.,
were among the biggest losers on fears of weakening demand.
However, Shanghai-listed issues held up relatively well, even
though the country's consumer price index ballooned to 6.5% in
July. Despite the steeper-than-forecast rise, many investors are
hopeful that global economic woes will force the country's central
bank to pump the brakes on its policy-tightening plan. By the
close, China's Shanghai Composite slipped 0.03%, Japan's Nikkei
lost 1.7%, South Korea's Kospi fell 3.6%, and Hong Kong's Hang Seng
European markets are mixed at midday, with just a few brave
souls tiptoeing in to hunt for bargains in the aftermath of steep
global losses. Traders are looking ahead to this afternoon's
interest-rate decision from the U.S. Fed, with the central bank's
statement likely to be scoured for any sign of potential stimulus
efforts. Ahead of this announcement, banks and commodities are
pacing the euro-zone laggards. At last check, the German DAX is
down 1.3%, London's FTSE 100 is up 0.03%, and the French CAC 40 is
Currencies and Commodities
The dollar is looking weak this morning, as increased anxieties
over the future of the U.S. economy have lessened the greenback's
appeal. Ahead of the open, the U.S. dollar index is down 0.4 point,
or 0.5%. It's a similar story for crude, with the
dollar-denominated asset down 1.5 points, or 1.9%, in pre-market
trading. However, gold is looking stronger than ever this morning,
with the precious metal up 53.8 points, or 3.1%, as traders flock
to the safe haven asset in the wake of Friday's downgrade.
Unusual Put and Call Activity:
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