It seems that U.S. stocks have caught a "case of the Mondays"
from Europe, with futures on all three major indexes pointing
lower. Specifically, futures on the Dow Jones Industrial Average
(DJIA ) are hovering nearly 55 points below fair value, while the
S&P 500 Index (SPX ) is trading over seven points below fair
value. Ongoing concerns over the fiscal health of the euro zone
(and the U.S. "debt ceiling") seem to have fanned the bearish
flames -- and with no notable economic reports on today's agenda,
the bulls could have little reason to put up much of a fight. The
star of the show this week will likely be tech stocks, as sector
bigwig IBM is slated to report earnings after today's close,
i-giant Apple, Inc. will hit the earnings stage after tomorrow's
closing bell, and PC titan Microsoft Corp. will release earnings on
Thursday. You'll definitely want to check back regularly at
SchaeffersResearch.com
for the latest earnings-related updates this week.
Hasbro, Inc. (HAS - 41.37) said that its second-quarter profit
increased 33% to $58.1 million, or 42 cents per share, from $43.6
million, or 29 cents per share, in the year-ago period. The
toymaker also revealed that revenue for the quarter jumped 23% to
$908.5 million. Analysts had expected HAS to post a much slimmer
profit of 33 cents per share on $848.8 million in revenue. The
company attributed the strong results to the success of its
"Transformers" franchise, and offered an optimistic outlook for
fiscal 2011. "We expect to deliver meaningful growth in both
revenues and earnings per share versus our 2010 reported full-year
results," explained Chief Financial Officer Deborah Thomas. HAS has
added nearly 1.8% ahead of the open.
Halliburton Company (HAL - 53.08) reported that second-quarter
net income rose 54% to $739 million, or 80 cents per share, from
$480 million, or 53 cents per share, a year ago. Revenue,
meanwhile, increased to $5.94 billion from $4.39 billion. Analysts
had predicted HAL to report a smaller profit of 73 cents per share
on $5.63 billion of revenue. "North America continues to deliver
very strong growth in revenue and profitability while international
profit recovered modestly," wrote HAL's Chief Executive Officer
Dave Lesar.
Thanks to increased customer subscriptions and upgrades, Check
Point Software Technologies Ltd. (CHKP - 56.58) reported a
first-quarter profit of 68 cents as revenue increased 15% to $300.6
million. These figures easily surpassed analysts' estimate for
earnings of 66 cents on $296 million in revenue, as well as the
company's previous projections for revenue in the $290-297 million
neighborhood. "We continued to outperform our projections in the
second quarter. These good results are driven by increased sales of
enterprise gateways with more software blades attached," said
CHKP's Chief Executive Officer Gil Shwed. The company also revealed
that it has named Amnon Bar-Lev as its new president, effective
immediately.
Earnings Preview
Today's earnings docket will feature reports from IBM (
IBM
), Charles Schwab (
SCHW
), Gannett Co. (
GCI
), Steel Dynamics (
STLD
), and Zions Bancorporation (
ZION
). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The economic calendar kicks off today with NAHB's housing market
index for July. Housing data continues on Tuesday, with the release
of home starts and building permits for June. Existing home sales
for June will hit the Street on Wednesday, along with the usual
update on U.S. petroleum supplies. A flurry of data will be
released Thursday, including weekly jobless claims, the Philly Fed
index for July, and the Conference Board's index of leading
economic indicators for June. There are no major economic reports
scheduled for Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,304,771 call contracts traded on Friday, compared to
838,574 put contracts. The resultant single-session put/call ratio
docked at 0.64, while the 21-day moving average was perched at
0.67.
The spring 2011 issue of
SENTIMENT
magazine is now available here.
Overseas Trading
Stocks in Asia ended lower today, as traders kept a wary eye on
the continuing debt drama in Europe and the U.S. These
macroeconomic concerns weighed on exporters across the region,
while the prospect of a broader resource tax in China dragged on
energy issues and property stocks. Meanwhile, in Taiwan, HTC turned
lower after the International Trade Commission (ITC) ruled that the
handset maker infringed on two patents owned by Apple (AAPL). By
the close, South Korea's Kospi shed 0.7%, Hong Kong's Hang Seng
lost 0.3%, and China's Shanghai Composite dipped 0.1%. Japanese
markets are closed for holiday.
Banking stocks are leading the decline in Europe, as traders
seem unimpressed by the results of last week's stress tests. Sector
heavyweights such as Deutsche Bank seemed to pass the test by only
the slimmest of margins, inciting fresh fears about the fate of
financial firms in the event of a worst-case sovereign debt
default. At last check, the French CAC 40 is down 1.3%, the German
DAX is 1% lower, and London's FTSE 100 is off 1.1%.
Currencies and Commodities
The big story this morning is gold, which has rallied to new
highs above $1,600 an ounce in pre-market trading. Ongoing concerns
over the fiscal health of the euro zone have sent traders flocking
to the "safe-haven" investment, sending gold to record levels
during the past few weeks. Ahead of the open, gold futures have
added 12 points, or 0.8%, to trade at $1,602 an ounce. On the other
hand, oil has backtracked this morning, with the August-dated
contract currently down 0.3 point, or 0.3%, to hover around $97.28
per barrel. Meanwhile, the U.S. dollar index -- a measure of the
dollar's performance against six other currencies -- has tacked on
0.5 point, or 0.7%, ahead of the open.
Unusual Put and Call Activity:
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