In spite of a drama-filled G-20 summit, a European Central Bank
policy meeting, and
pessimistic projections
from the Federal Reserve, U.S. stock futures are pointed higher,
albeit slightly, ahead of today's session. Specifically, German
Chancellor Angela Merkel and French President Nicolas Sarkozy have
suspended Greece's most recent tranche of aid pending the country's
referendum, tentatively scheduled for Dec. 4.
Bringing things back a little closer to home, following
yesterday's policy meeting, Fed Chairman Ben Bernanke expressed his
continued frustration with the current state of fiscal instability,
as the Federal Reserve lowered its projections for the U.S. economy
for the third time this year. Investors are hoping this morning's
unemployment claims provide a brief ray of hope ahead of tomorrow's
highly anticipated nonfarm payrolls report for October. Against
this backdrop, the Dow Jones Industrial Average (DJIA) finds itself
trading 51 points north of fair value, while the broader S&P
500 Index (SPX) is set to open about 5 points higher.
In earnings news, Transocean Ltd. (RIG - 55.99) last night
stepped into the earnings confessional. RIG swung to a
third-quarter loss of $71 million, or 22 cents per share, compared
to its year-ago profit of $368 million, or $1.15 per share. The
results were negatively impacted by roughly $9 million in expenses
related to "the Macondo well incident," as RIG described the
catastrophic oil spill in its company release. Meanwhile, revenue
dropped by 1.7% to $2.24 billion. RIG's quarterly results came in
weaker than expected, as analysts, on average, had been looking for
earnings of 79 cents per share on revenue of $2.36 billion.
Meanwhile, Qualcomm (QCOM - 52.18) said its fiscal
fourth-quarter profit jumped 22% to $1.06 billion, or 62 cents per
share, from $865 million, or 53 cents per share, in the year-ago
period. Excluding items, QCOM reported a profit of 80 cents per
share. Revenue, meanwhile, increased 39% to $4.12 billion. The San
Diego-based company's results beat analysts' forecast for earnings
of 78 cents per share on $4 billion in revenue. QCOM is now
expecting a fiscal 2012 profit of $3.42 to $3.62 per share, with
sales expected to range between $18 billion and $19 billion. Wall
Street was looking for a full-year profit of just $3.47 per share
on $17.29 billion in sales. For the current quarter, the wireless
chip manufacturer expects earnings of 86 cents to 92 cents per
share on $4.35 billion to $4.75 billion in revenue, while analysts
are predicting a first-quarter profit of 85 cents per share on
$4.24 billion in sales. Shares of QCOM are trading about 9% higher
ahead of the bell.
Finally, Kraft Foods (KFT - 34.64) banked a third-quarter profit
of $922 million, or 52 cents per share, up 22% from its year-ago
earnings of $754 million, or 43 cents per share. On an adjusted
basis, earnings arrived at 58 cents per share, while revenue
increased 12% to $13.2 billion. The results surpassed Wall Street's
expectations, which called for a profit of 55 cents per share on
$12.81 billion in revenue. Looking ahead, KFT hiked its full-year
forecast. The food giant is now predicting operating earnings of
$2.27 per share on 6% revenue growth, up from its prior outlook for
a profit of $2.25 per share on 5% revenue growth. KFT was last seen
up just over 2% in pre-market trading.
Earnings Preview
Today's earnings docket will also feature reports from American
International Group (
AIG
), Starbucks (
SBUX
), Kellogg (
K
), Sara Lee (
SLE
), Eastman Kodak (
EK
), Chesapeake Energy (CHK), Alpha Natural Resources (ANR), CBOE
Holdings (CBOE), NYSE Euronext (NYX), MGM Resorts (MGM), Agrium
(AGU), CBS Corp. (CBS), DirecTV (DTV), Estee Lauder (EL), LinkedIn
(LNKD), and SunPower (SPWRA). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
As usual, today'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 785,840 call contracts traded on Wednesday, compared to
522,020 put contracts. The resultant single-session put/call ratio
arrived at 0.66, while the 21-day moving average was 0.67.
Overseas Trading
Stocks in Asia pulled back today, pressured by familiar anxiety
over the euro zone. European leaders on Wednesday warned Greece
that it won't receive any additional aid until the country decides
whether it will remain in the euro zone, heightening anxiety ahead
of the G-20 summit. These developments weighed on banking stocks,
with HSBC emerging as a notable laggard in Hong Kong. By the close,
Hong Kong's Hang Seng fell 2.5%, Japan's Nikkei declined 2.2%,
South Korea's Kospi tumbled 1.5%, and China's Shanghai Composite
bucked the trend to add 0.2%.
On the other hand, the major European benchmarks are modestly
higher at midday. Somewhat perversely, traders seem hopeful that
the beleaguered Greek government may collapse, postponing the
threatened referendum on the bailout package. At midday, the French
CAC 40 is up 1.9%, the German DAX has added 1.8%, and London's FTSE
100 is 0.4% higher.
Currencies and Commodities
Unusual Put and Call Activity:
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topics on
Option Volume
and
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.
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