Stocks Ready to Rally on Hopes for Greek Debt Deal

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Attempting to extend yesterday's trek into the black , U.S. stock futures are trading slightly higher ahead of the bell, riding the optimistic-yet-cautious tone out of the euro zone. There is mounting hope that Greek officials will soon be able to secure multi-agency bailout funds and strike a deal to avoid a disorderly default . Back home, Wall Street seemed little moved by Federal Reserve Chairman Ben Bernanke's meeting with the Senate Budget Committee yesterday, as his tenor was anything but upbeat. Bernanke reiterated sentiment from last week's testimony to the House Budget Committee , and warned that the federal deficit "will become unsustainable within 15 or 20 years at the most." With no major economic reports on the agenda for today, traders will wade through another round of corporate earnings reports while awaiting any new developments out of Europe. Against this backdrop, the Dow Jones Industrial Average (DJIA) and Nasdaq Composite (COMP) are looking to continue their quest for new multi-year highs .

Dow, S&P and Nasdaq futures

Thanks to increased attendance and spending at its theme parks, as well as higher fees paid to its ESPN cable network, Walt Disney Company (DIS - 40.98) posted a fiscal first-quarter profit of $1.46 billion, or 80 cents per share, up 12% from a year-ago profit of $1.3 billion, or 68 cents per share. Meanwhile, revenue inched up 0.6% to $10.78 billion. The results were mixed, as DIS' bottom line edged past analysts' expectations for 71 cents per share, while its revenue failed to meet the Street's view of $11.18 billion. At last check, DIS is headed for a fractional slide out of the gate.

Meanwhile, Hartford Financial Services Group (HIG - 19.12) said its fourth-quarter profit plummeted 79% to $127 million, or 24 cents per share, from last year's profit of $619 million, or $1.24 per share. On an adjusted basis, HIG's earnings dropped to 69 cents from $1.06 per share. Revenue slipped 4.9% to $5.64 billion. Results for the insurance and financial firm were mixed, as Wall Street was looking for per-share earnings of 59 cents on $5.76 billion in sales. In pre-market trading, HIG is up roughly 1%.

Buffalo Wild Wings (BWLD - 70.19) banked a fourth-quarter profit of $13.6 million, or 73 cents per share, up 34% from $10.2 million, or 55 cents per share, in the year-ago period. Meanwhile, revenue rose by 34.5% to $220.5 million, as same-store sales increased 8.9%. The results surpassed analysts' expectations for a profit of 67 cents per share on revenue of $210.5 million. BWLD is readying for a 15% surge to open the day.

Early this morning, Sprint Nextel (S - 2.45) said it swallowed a fourth-quarter loss of $1.3 billion, or 43 cents per share -- wider than its year-ago deficit of $929 million, or 31 cents per share. Revenue for the quarter increased 5.1% to $8.72 billion, but the company's bottom line was impacted by asset impairments and severance charges. Analysts were looking for a slimmer loss of 37 cents per share on just $8.69 billion in revenue. Sprint gained 1.6 million new customers during the quarter, with iPhone users making up a healthy proportion of the converts. The stock is up 4% in pre-market action.

Finally, CVS Caremark (CVS - 43.08) unveiled fourth-quarter earnings of $1.06 billion, or 81 cents per share, up 3.7% from $1.03 billion, or 75 cents per share, in the year-ago quarter. Excluding items, per-share profit rose to 89 cents from 79 cents. Revenue increased 15% to $28.3 billion. The Rhode Island-based company's results were mixed, as Wall Street was expecting earnings of 89 cents per share on $28.12 billion in revenue. Looking ahead, CVS projected an adjusted current-quarter profit of 61 cents to 63 cents per share, while analysts are anticipating earnings of 61 cents per share. The pharmacy healthcare provider also upped its forecast for full-year adjusted earnings to a range of $3.18 to $3.28 per share, from its previous guidance for $3.15 to $3.25 per share. Analysts, on average, are looking for a full-year profit of $3.25 per share. CVS is poised to start trading with a 2.2% gain.

Earnings Preview

Today's earnings docket will also feature reports from Cisco Systems ( CSCO ), Visa ( V ), Whole Foods Market ( WFM ), Groupon ( GRPN ), Level 3 Communications ( LVLT ), hhgregg (HGG), Moody's (MCO), Ralph Lauren (RL), Time Warner Inc. (TWX), Akamai Technologies (AKAM), News Corp. (NWSA), and Prudential Financial (PRU). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The regularly scheduled crude inventories report will hit the Street today, while Thursday features weekly data on jobless claims, along with the government's wholesale inventories report. Finally, Friday wraps up with the December trade balance, January's Treasury budget, and the most recent Thomson Reuters/University of Michigan consumer sentiment index. Furthermore, Bernanke will once again step up to the podium, with the central banker slated to speak at the NAHB International Builders Show.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,406,477 call contracts traded on Tuesday, compared to 798,440 put contracts. The resultant single-session put/call ratio arrived at 0.57, while the 21-day moving average was 0.59.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended firmly higher, following suit with Wall Street's positive finish on Tuesday. Negotiations between Greek leaders are slated to continue today, and hopes are high that the country will approve the necessary austerity measures to secure another tranche of aid from bailout officials. In equity news, Toyota Motor provided a halo lift for its fellow auto stocks after hiking its full-year profit guidance, while rumors of a possible tie-up among Panasonic, Fujitsu, and Renesas Electronics propelled chip makers higher. By the close, China's Shanghai Composite rallied 2.4% and Hong Kong's Hang Seng rose 1.5%, while Japan's Nikkei and South Korea's Kospi tacked on 1.1% apiece.

Bulls have also taken the reins in Europe, with banks among the top gainers. Traders are pricing in some optimism over a potential resolution to the Greek debt standoff, and sentiment was also lifted by upbeat earnings from Commerzbank's Polish unit. At last look, the German DAX is up 0.8% and the French CAC 40 has climbed 0.5%, while London's FTSE 100 is modestly higher.

Overseas markets

Currencies and Commodities

The greenback is trading modestly lower this morning, with the U.S. dollar index down fractionally at last look. Elsewhere, crude futures have moved higher, with the front-month contract up 87 cents, or 0.9%. Meanwhile, gold futures are hovering just below breakeven , with the malleable metal last seen 70 cents, or 0.04%, lower at $1,747.70 an ounce.

Currencies and commodities

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This article appears in: Investing , Options

Referenced Stocks: CSCO , GRPN , LVLT , V , WFM

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