U.S. stocks are set to start the week on a sour note, thanks to
fading optimism over last week's highly anticipated
euro-zone debt deal
. Furthermore, it appears Wall Street is taking a cautious approach
to a week chock-full of notable items on the agenda, including a
summit of Group of 20 (G-20) leaders, a press conference with
Federal Reserve Chairman Ben Bernanke, and an onslaught of
unemployment data. In the meantime, traders are busy digesting the
latest headlines surrounding MF Global Holdings (MF), which is
reportedly on the verge of filing for Chapter 11. Against this
backdrop, the Dow Jones Industrial Average (DJIA) is trading more
than 100 points south of fair value, while the broader S&P 500
Index (SPX) is set to
defy Halloween history
.
In equities news, MF Global Holdings Ltd. (MF - 1.20) is nearing
a deal to file for bankruptcy protection and sell assets to
Interactive Brokers Group (
IBKR
), according to media reports. IBKR will likely make an initial bid
of about $1 billion during a court-supervised auction,
The Wall Street Journal
said. What's more, according to the latest speculation, MF is now
suspended from doing business with the Federal Reserve Bank of New
York.
In earnings news, Humana Inc. (HUM - 80.35) said third-quarter
earnings rose 13% to $444.8 million, or $2.67 per share, from last
year's profit of $393.2 million, or $2.32 per share. Excluding
items, the insurance issue said earnings jumped to $2.54 from $2.01
per share. Sales, meanwhile, increased 11% to $9.3 billion. The
results topped expectations, as analysts were calling for a
per-share profit of $2.02 on revenue of $9.25 billion. Looking
ahead, the company upped its 2011 earnings forecast to a range of
$8.35 to $8.40 per share, and projected 2012 earnings of $7.40 to
$7.60 per share. Analysts, on average, were expecting a per-share
profit of $7.65 for 2011, and $7.79 for 2012.
Earnings Preview
Today's earnings docket will also feature reports from Allstate
(
ALL
), AvalonBay Communities (
AVB
), Cavium (
CAVM
), Haemonetics (
HAE
), Leap Wireless (LEAP), Taser International (TASR), Anadarko
Petroleum (APC), and W&T Offshore (WTI). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The economic calendar begins today with the release of the
Chicago purchasing managers index (PMI) for October. The ISM
manufacturing index is set to hit the Street on Tuesday, along with
data on construction spending and auto sales. The monthly onslaught
of jobs data begins on Wednesday, with ADP's private-sector
employment report and the Challenger, Gray & Christmas update
on monthly job cuts both due for release. Around midday, the
Federal Open Market Committee (FOMC) will announce its latest
monetary policy decision, and a 2:15 p.m. press conference will
follow. As usual, Thursday's calendar features weekly jobless
claims. Also on the day's docket are the ISM services index,
third-quarter productivity and labor costs, and factory orders.
Bright and early Friday morning, all eyes will be on the Labor
Department's nonfarm payrolls report for October.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,098,158 call contracts traded on Friday, compared to
613,245 put contracts. The resultant single-session put/call ratio
arrived at 0.56, while the 21-day moving average was 0.68.
Overseas Trading
Stocks in Asia ended lower today, giving back a portion of the
previous week's outsized gains. A notable forex maneuver was in the
spotlight, after the Ministry of Finance asked the Bank of Japan to
sell an undisclosed amount of yen in order to temper the
high-flying currency's momentum. The move provided some minor
relief for Japanese exporters, such as Toyota -- but sector peer
Honda didn't fare as well, thanks to reports suggesting the
automaker could face serious production snags due to flooding at
its Thailand facilities. Meanwhile, strength in the U.S. dollar
versus the newly stifled yen prompted weakness in commodities,
which weighed on resource stocks. By the close, South Korea's Kospi
slipped 1.1%, Hong Kong's Hang Seng declined 0.8%, Japan's Nikkei
shed 0.7%, and China's Shanghai Composite gave up 0.2%.
Similarly, miners are pacing the laggards in Europe, as a
surging greenback weighs on metals prices. French banks have also
taken a turn for the worse, after Citigroup trimmed its price
targets on BNP Paribas and Societe Generale. Elsewhere in the
financial sector, Barclays is trading modestly higher in the U.K.
on the heels of its third-quarter earnings report. At last check,
the French CAC 40 is off 1.8%, the German DAX is down 1.6%, and
London's FTSE 100 is 1.1% lower.
Currencies and Commodities
The greenback has continued its upward momentum this morning,
with the U.S. dollar index up 1.1% at last check. Crude futures,
meanwhile, have extended their recent pullback, with the
front-month contract down 0.7% at $92.66 per barrel. Finally, gold
futures are also on the decline ahead of the bell, with the yellow
metal last seen 1.4% lower at $1,723 an ounce.
Unusual Put and Call Activity:
Due to an error with our data provider, the Unusual Put and Call
charts are unavailable this morning. We apologize for any
inconvenience.
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