U.S. stocks started the week on a high note, as Wall Street
celebrated the end of Col. Muammar Gaddafi's reign in Libya. By the
close, all three major indexes were sitting on small, but
respectable, gains. However, the big story in the U.S. this week is
Federal Reserve Chairman Ben Bernanke's speech, which is set to
happen in Jackson Hole, Wyo., on Friday. Traders are hopeful that
the tight-lipped chairman will hint at further quantitative easing
for the still-struggling economy. Meanwhile, upbeat economic data
from China and Europe have given the bulls something tangible to
celebrate this Tuesday morning, putting all three major indexes in
position to start the session in the black.
Williams-Sonoma, Inc. (WSM - 30.03) said second-quarter income
rose 28% to $39.3 million, or 37 cents per share, from $30.8
million, or 28 cents per share, a year ago. Excluding items, WSM
earned 37 cents per share, while revenue rose to $814.8 million.
Analysts had expected WSM to report a profit of 36 cents per share
on $822.8 million of revenue. Looking ahead, the home furnishings
firm increased its full-year earnings forecast to a range between
$2.17 and $2.22 per share, in line with analysts' forecast for
fiscal 2012 earnings of $2.22 per share. Ahead of the open, WSM is
Growing commodities costs have hurt H.J. Heinz Company (HNZ -
52.04), which reported its first-quarter results this morning.
Breaking down the numbers, HNZ said its first-quarter profit fell
to $226.1 million, or 70 cents per share, from $240.4 million, or
76 cents per share, in the year-ago period. Excluding special
items, Heinz said it earned 78 cents per share, falling short of
the consensus estimate for 83 cents per share. Meanwhile, revenue
increased to $2.85 billion from $2.48 billion. Finally, Heinz
affirmed its fiscal-year outlook of $3.24 to $3.32 a share, which
is a far cry from the consensus estimate for full-year earnings of
$3.65 per share.
Today's earnings docket will feature reports from Daktronics (
), Medtronic (
), Melco Crown Entertainment (
), and Trina Solar (
). Keep your browser at
for more news as it breaks.
Today's economic calendar features new home sales for July,
along with the Richmond Fed's manufacturing index for August.
Durable goods orders for July are due out on Wednesday, as well as
the regularly scheduled update on petroleum stockpiles. Thursday
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.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,029,436 call contracts traded on Monday, compared to
755,987 put contracts. The resultant single-session put/call ratio
arrived at 0.73, while the 21-day moving average was 0.79.
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Asian markets ended higher today, with traders expressing relief
over the latest Chinese economic data. The HSBC China Flash
purchasing managers index (PMI) arrived at 49.8 in August, edging
up from July's reading of 49.3. The report still points to
contraction in the country's factory activity, though China's
economy so far seems to be avoiding the "crash landing" that many
feared would result from the government's policy-tightening
efforts. Elsewhere, Kia Motors helped lead a rebound in Seoul,
after the automaker unveiled a stock buyback worth 163.3 billion
won. By the close, South Korea's Kospi rallied 3.9%, Hong Kong's
Hang Seng added 2%, China's Shanghai Composite climbed 1.5%, and
Japan's Nikkei tacked on 1.2%.
Upbeat manufacturing data also brought out the bulls in Europe,
after Germany's flash PMI for August weighed in at 52 --
comfortably topping consensus estimates, and pointing to continued
expansion in the factory sector. With sentiment already lifted by
China's well-received data, traders have taken this as an
opportunity to scoop up beaten-down stocks. At last check, the
French CAC 40 is up 1.9%, the German DAX is 1.7% higher, and
London's FTSE 100 has climbed 1.2%.
Currencies and Commodities
The dollar has lost ground against its rivals this morning, with
the euro getting a lift after Germany's PMI reading showed
manufacturing activity didn't slow as expected this month. Ahead of
the open, the U.S. dollar index is down 0.4 point, or 0.5%.
Meanwhile, the end of Col. Muammar Gaddafi's regime in Libya has
provided a boost for black gold, with crude futures up 1.1 points,
or 1.3%, this morning. Elsewhere, gold has pulled back from its
record highs, as traders take profits ahead of Bernanke's highly
anticipated speech this Friday. Against this backdrop, gold futures
have surrendered 7.4 points, or 0.4%.
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