Stocks Set to Pare Gains as G-20 Defers on Europe Aid

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After last week's exciting foray into multi-year highs , U.S. stock futures are pointed modestly lower this morning, with investors digesting the latest from a meeting of the Group of 20 (G-20). After a weekend summit, G-20 finance leaders opted to delay a decision to expand the International Monetary Fund's ( IMF ) lending power, with world leaders waiting on Europe to make the first move in bolstering its bailout reserves. Ahead of the bell, the Dow Jones Industrial Average (DJIA) is trading just below breakeven, while the broader S&P 500 Index (SPX) is staring at 7-point drop.

Dow, S&P and Nasdaq futures

In earnings news, AES Corporation (AES - 13.80) swallowed a fourth-quarter loss of $209 million, slimmed down from its year-ago deficit of $436 million. Earnings from continuing operations retreated to 12 cents per share from 16 cents per share; on an adjusted basis, AES earned 23 cents per share. Revenue for the quarter ticked up 0.9% to $4.27 billion. Analysts, on average, were looking for a profit of 22 cents per share on $3.46 billion in revenue. Additionally, the electric utility said it has agreed to sell its AES Ironwood LLC and AES Prescott LLC natural gas assets to PPL Corp. ( PPL ) for roughly $304 million, with the transaction expected to close during the second quarter.

Elsewhere, Lowe's Companies, Inc. (LOW - 27.16) said its fourth-quarter profit arrived at $322 million, or 26 cents per share, a 13% year-over-year improvement from $285 million, or 21 cents per share. Same-store sales rose 3.4%, while overall revenue jumped 11% to $11.63 billion. The results came in better than expected, with analysts calling for a per-share profit of 24 cents on $11.34 billion in sales. Looking ahead, LOW is projecting full-year earnings of $1.75 to $1.85 per share on a 1% to 2% increase in sales. Wall Street, meanwhile, had forecast earnings of $1.79 per share on flat sales. LOW is up 0.7% in pre-market trading.

Finally, Transocean Ltd. (RIG - 50.73) reported a fourth-quarter loss of $6.12 billion, or $18.62 per share, compared to last year's loss of $799 million, or $2.51 per share. Excluding approximately $6.17 billion in charges -- including roughly $1 billion in estimated loss contingencies linked to the catastrophic Macondo well incident of 2010 -- earnings landed at 24 cents per share. Revenue enjoyed a 14% bump to $2.4 billion. The results beat Wall Street's forecast for adjusted earnings of 20 cents per share on $2.32 billion in revenue. RIG is trading 2.7% higher ahead of the bell.

Earnings Preview

Today's earnings docket will also feature reports from Career Education Corporation ( CECO ), Cooper Tire & Rubber ( CTB ), Dendreon ( DNDN ), Human Genome Sciences (HGSI), Jazz Pharmaceuticals (JAZZ), Quicksilver Resources (KWK), Priceline.com (PCLN), Savient Pharmaceuticals (SVNT), Salix Pharmaceuticals (SLXP), SINA Corp. (SINA), Southwestern Energy (SWN), Valeant Pharmaceuticals (VRX), and Zagg (ZAGG). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar kicks off today with the pending home sales report. Tuesday features durable goods data, the S&P/Case-Shiller home price index, and the Conference Board's latest consumer confidence reading. On Wednesday, the revised fourth-quarter GDP estimate will hit the Street, along with the Chicago purchasing managers index (PMI), the regularly scheduled crude inventories report, and the Fed's Beige Book. Thursday's round-up will include weekly jobless claims, personal income and spending data, the ISM manufacturing index, and construction spending. There are no major economic reports scheduled to be released on Friday.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,277,828 call contracts traded on Friday, compared to 887,567 put contracts. The resultant single-session put/call ratio arrived at 0.69, while the 21-day moving average was 0.61.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets ended mostly lower today, as climbing oil prices kept a lid on investor sentiment. However, automakers were a pocket of strength in mainland China, after the government announced plans to procure only domestic vehicles in 2012. A still-surging yen helped Japanese rivals like Honda close higher, but auto stocks Kia and Hyundai both tumbled in Seoul. By the close, South Korea's Kospi declined 1.4%, Hong Kong's Hang Seng shed 0.9%, Japan's Nikkei lost 0.1%, and China's Shanghai Composite advanced 0.3%.

European stocks are also sitting south of breakeven at midday, with lofty gas prices threatening to crimp both corporate earnings and consumer spending. Traders also cast a wary eye on an anti-climactic meeting of G-20 finance ministers over the weekend, with the group deferring a decision on additional aid for Europe until their planned April meeting. At last check, London's FTSE 100 has lost 0.9%, the German DAX is down 1.1%, and the French CAC 40 is 1.2% lower.

Overseas markets

Currencies and Commodities

The U.S. dollar index is up 0.3% ahead of the bell at $78.56. Conversely, after setting a string of nine-month highs during last week's trading, crude oil is lower, with the front-month contract 1.1% lower at $108.58. Gold futures are headed south, as well, with the malleable metal down 0.4% at $1,768.70 per barrel.

Currencies and commodities

Unusual Put and Call Activity:

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This article appears in: Investing , Options

Referenced Stocks: CECO , CTB , DNDN , IMF , PPL

Schaeffer's Investment Research

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