Futures are pointed lower this morning, as traders grow weary
ahead of tomorrow's highly anticipated speech by Federal Reserve
Chairman Ben Bernanke. As the week has progressed, hopes of
additional stimulus measures by the Fed seem to have evaporated,
and the Street has had to digest several not-so-pleasant pieces of
economic data along the way. Of bigger concern to the Street today,
though, is news that Apple Inc.'s (AAPL - 376.18) CEO Steve Jobs
has resigned. The resignation has sent shockwaves through the
Street, as investors assess the future of AAPL sans Jobs, who
helped make the tech firm the second-most valuable corporation in
the world.
First things first, last night, AAPL's Steve Jobs announced that
he would be resigning from his role as CEO. This isn't exactly
surprising, though, as health problems over the years have caused
Jobs to take several medical leaves from his position. "I have
always said if there ever came a day when I could no longer meet my
duties and expectations as Apple's CEO, I would be the first to let
you know. Unfortunately, that day has come," wrote Jobs in his
resignation letter. Apple's board has appointed Tim Cook to replace
the iconic CEO. Jobs will remain on board as the chairman of the
board of directors -- a position created just for him. Analysts
have already started to weigh in, with J. P. Morgan reiterating its
"overweight" opinion of the shares, as Jobs' exit could create an
"attractive entry point" for the stock. Meanwhile, the Street seems
to be adjusting to this news, with shares down nearly 4% in
pre-market trading.
Meanwhile, in earnings news, Big Lots (BIG - 32.38) said its
fiscal second-quarter net profit was $35.7 million, or 50 cents per
share, compared to $38.9 million, or 48 cents per share, in the
year-ago period. Revenue for the quarter jumped 2.2% to $1.17
billion. These results came in higher than analysts' prediction for
earnings of 44 cents per share on $1.16 billion in revenue. Looking
ahead, BIG revised its fiscal 2011 earnings per share forecast to
$2.80 to $2.90, from $2.75 to $2.90 previously. Analysts had
forecast full-year earnings of $2.89. "This updated guidance
reflects our outperformance during the second quarter and the
forecasted positive impact of recent share repurchase activity,
partially offset by the expected impact of our recently acquired
Canadian business," BIG said in a statement.
Guess Inc. (GES - 33.29) reported second-quarter earnings of
$60.7 million, or 65 cents per share - down 9.1% from the year-ago
quarter. Excluding items, the retailer said it earned 84 cents per
share, matching analysts' expectations. Meanwhile, revenue rose 17%
to $677.2 million, topping the Street's forecast for sales of
$656.4 million. However, GES projected current-quarter earnings of
71 cents to 74 cents per share on revenue of $650 million to $665
million, falling woefully short of analysts' predictions for a
per-share profit of 84 cents on sales of $688 million. Furthermore,
the company cut its full-year adjusted earnings target to a range
of $3.25 to $3.35 per share, and narrowed its revenue target to a
range of $2.74 billion to $2.78 billion. Previously, GES had
forecast full-year earnings of $3.30 to $3.50 per share on sales of
$2.74 billion to $2.8 billion.
Applied Materials (AMAT -11.36) reported a fiscal third-quarter
profit of $476 million, or 36 cents per share, nearly quadrupling
its year-ago earnings of $123 million, or 9 cents per share.
Excluding items, AMAT earned 35 cents per share, while sales rose
11% to $2.79 billion. However, AMAT predicted that fourth-quarter
earnings would range between 16 cents and 24 cents per share,
excluding items, based on a 15% to 30% sequential drop in revenue.
The forecast fell short of analysts' expectations, which called for
a profit of 30 cents per share for the current quarter. "While the
fundamental drivers of our markets remain strong, we are seeing
softness in our business resulting from the uncertain economic
environment and overcapacity in solar," said Chairman and CEO Mike
Splinter.
Earnings Preview
Today's earnings docket will feature reports from Aruba Networks
(
ARUN
), Cyberonics (
CYBX
), Hormel Foods (
HRL
), Pandora Media (
P
), and Sanderson Farms (
SAFM
). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
Today brings our usual weekly report on initial and continuing
jobless claims. The economic calendar ends with a bang on Friday,
with all eyes turning to Jackson Hole and Fed Chairman Ben
Bernanke's highly anticipated speech on "Near- and Long-Term
Prospects for the U.S. Economy." Also slated to hit the Street are
the Commerce Department's revised estimate of second-quarter gross
domestic product (GDP), and the final Thomson Reuters/University of
Michigan consumer sentiment index for August.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 889,331 call contracts traded on Wednesday, compared to
596,897 put contracts. The resultant single-session put/call ratio
arrived at 0.67, while the 21-day moving average was 0.80.
The summer 2011 issue of
SENTIMENT
magazine is now available here.
Overseas Trading
Stocks in Asia ended mostly higher today, keeping pace with
gains on Wall Street. However, there was some patchy weakness in
the tech sector on news that AAPL CEO Steve Jobs has resigned. A
number of companies with ties to the iPhone parent slipped, with
Foxconn and Hon Hai Precision Industry tumbling in Taiwan. On the
other hand, Samsung rallied in Korea after a Dutch patent court
dismissed most of Apple's patent infringement claims against its
Galaxy smartphones. By the close, China's Shanghai Composite gained
2.9%, Japan's Nikkei and the Hong Kong Hang Seng each rose 1.5%,
and South Korea's Kospi added 0.6%.
European markets are wobbling around breakeven at midday,
despite well-received earnings from French bank Credit Agricole and
U.K.-listed commodity giant Glencore. Early gains have faded
heading into the second half of the session, with a bit of anxiety
setting in ahead of tomorrow's speech from Bernanke. At last look,
the German DAX is up 0.6%, the French CAC 40 is 0.8% higher, and
London's FTSE 100 is off 0.1%.
Currencies and Commodities
Gold has continued to pull back from record highs this morning,
as investors continue their round of profit-taking. Last night,
COMEX upped its margin requirement by 27% in order to "ensure
adequate collateral coverage," marking the second such move in as
many weeks. Amid this backdrop, gold futures are down nearly 44
points, or 2.5%. Meanwhile, the U.S. dollar is trading fractionally
lower this morning, as anxieties mount ahead of tomorrow's speech
by the Fed. Ahead of the open, the U.S. dollar index is down 0.06
point, or 0.1%. Finally, crude has rebounded slightly from
Wednesday's sell-off, with the October-dated contract up 0.5 point,
or 0.6%.
Unusual Put and Call Activity:
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topics on
Option Volume
and
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