Stocks are set for a strong open this morning, as futures on all
three major indexes are pointing significantly higher. Over the
weekend, word broke that Congress had
reached an agreement on a debt deal that will essentially cut
spending and increase the federal debt ceiling. "There are still
some very important votes to be taken by Congress, but I want to
announce the leaders of both parties in both chambers have reached
an agreement that will reduce the deficit and avoid default,"
President Obama said. This is a 180-degree reversal from Friday,
when buyers hit the exits after the all-important House vote over a
debt solution had been delayed. As a result, the Street seems to
have breathed a tremendous sigh of relief this morning, with
futures on the Dow Jones Industrial Average (DJIA ) trading nearly
153 higher, while the S&P 500 Index (SPX ) is hovering some 15
points north of fair value.
In earnings news, health insurance issue Humana Inc. (HUM -
74.58) reported a 35% jump in its quarterly profit as a result of
increased revenue in its retail and health-maintenance segments.
For the quarter, Humana said it earned $726.5 million, or $2.71 per
share, including a one-time benefit to its reserves, compared to
$535.9 million, or $2.00 per share, in the year-ago period.
Excluding items, the firm earned $2.50 per share. Analysts,
meanwhile, had expected HUM to report a much slimmer profit of
$2.05 a share. Revenue for the quarter rose 8% to $9.28 billion
from $8.59 billion. The insurance company also hiked its fiscal
2011 forecast to between $7.50 and $7.60 per share, significantly
higher than its previous estimate of $6.70 to $6.90 per share. As a
result of the upbeat report, HUM has added nearly 3% ahead of the
Meanwhile, The Allstate Company (ALL - 27.72) confessed to a
second-quarter loss of $642 million, or $1.19 per share, from a
year-ago profit of $441 million, or 27 cents per share, as the
result of a series of catastrophic loss events including five
tornadoes. In fact, catastrophe losses jumped to $2.34 billion,
against $96.8 million in the year-ago period. Revenue rose 5% to
$8.08 billion, compared to $7.66 billion a year ago. Analysts had
predicted Allstate to report a loss of $1.46 per share.
In management news, Sandra Cochran, president and chief
operating officer of Cracker Barrel Old Country Store, Inc. (CBRL -
45.11), will soon take the reins as chief executive officer. She
will be replacing 10-year veteran Michael Woodhouse, who will
remain chairman of the board. This management change follows
Lawrence Hyatt being named as chief financial officer, with the CFO
looking to "hand over the reins to a new generation." Cochran said
she plans to outline CBRL's business plan for 2012 in the company's
earnings report on Sept. 13. (
Editor's Note: A previous version of this article mistakenly
said Cochran will become executive chairman. Furthermore, CBRL
executives have asked that we clarify that the changes have been
planned since last year. We apologize for any confusion.
Today's earnings docket will feature reports from Boston
), Forest Oil (
), Loews (
), Allstate (
), Humana (
), Alkermes (ALKS), Vivus (VVUS), Changyou.com (CYOU), Ctrip.com
International (CTRP), and Sohu.com (SOHU). Keep your browser at
for more news as it breaks.
The economic calendar kicks off today with the ISM manufacturing
index for July and construction spending for June. Tuesday brings
the latest reports on personal incomes and spending, as well as
auto and truck sales for July. Employment data starts to hit the
Street Wednesday, when ADP releases its report on private-sector
payrolls for July. Also on tap are the ISM services index, June's
factory orders, and the usual report on weekly petroleum
inventories. Thursday's lone economic report is the regularly
scheduled update on weekly jobless claims. On Friday, all eyes will
be on the Labor Department's nonfarm payrolls report for July.
Later in the session, the Fed weighs in on June's consumer credit
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 957,155 call contracts traded on Friday, compared to
750,290 put contracts. The resultant single-session put/call ratio
docked at 0.78, while the 21-day moving average remained at
The summer 2011 issue of
magazine is now available here.
Most Asian stocks finished higher today, thanks to optimism over
the end of the U.S. debt drama. However, gains in China were
relatively muted, after data from both HSBC and the China
Federation of Logistics and Purchasing showed a contraction in
manufacturing in June. By the close, Japan's Nikkei added 1.3%,
South Korea's Kospi gained 1.8%, Hong Kong's Hang Seng advanced 1%,
and China's Shanghai Composite edged almost 0.1% higher.
In similar fashion, European stocks are higher at midday, after
President Obama announced a bipartisan deal to raise the debt
ceiling. In equities news, European Aeronautic Defence & Space
was up roughly 1.4% after announcing plans to buy Vizada from
private-equity fund Apax France, while Porsche Automobil Holding SE
soared 1.5% after reporting stronger-than-expected first-half
operating profits. At last check, France's CAC 40 and Germany's DAX
have each tacked on 0.9%, while London's FTSE 100 is up just
Currencies and Commodities
Crude futures have advanced this morning, as Congress' debt
resolution has boosted the demand for black gold. Ahead of the
open, crude oil is up 1.3 points, or 1.3%. Elsewhere, the greenback
has given up a portion of its gains, down 0.2 point, or 0.2%, in
pre-market activity. Meanwhile, the upbeat news over the U.S. debt
situation has had an adverse effect on gold, with the "safe-haven"
asset down 12.7 points, or 0.8%, ahead of the open.
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our
Open Interest Configurations
Every morning, our research staff analyzes the prior day
and the overnight markets, and monitors the morning wires to
give you an accurate preview of the day to come. If you enjoyed
today's edition of Opening View, sign up
for free daily delivery, straight to your inbox, before the
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.