A bullish bias lingers
this morning, as futures on all three major market indexes are
pointed north of breakeven. Wall Street is letting yesterday's
excitement sink in, after the most
recent consumer confidence report
guided the Dow Jones Industrial Average (DJIA) to its first daily
close above the 13,000 mark in nearly four years. Traders are also
digesting the European Central Bank's (ECB) latest effort to boost
lending to banks at reduced rates. On the domestic front, a flood
of economic data is due out today, including the revised
fourth-quarter gross domestic product (
GDP
), the Chicago purchasing managers index (PMI), and the Federal
Reserve's Beige Book. If that doesn't leave investors with enough
to chew on, Fed Chairman Ben Bernanke is scheduled to testify
before the House Financial Services Committee at 10 a.m. Eastern.
Against this busy backdrop, the DJIA is trading 22 points higher
ahead of the bell, while the broader S&P 500 Index (SPX) is up
3 points.
In earnings news, First Solar (FSLR - 591.54) confessed to a
fourth-quarter loss of $413.1 million, or $4.78 per share, marking
a steep decline from its year-ago earnings of $155.9 million, or
$1.80 per share. Excluding items, FSLR earned $1.26 per share,
while net sales edged up 8% to $660 million. Unfortunately,
analysts were looking for adjusted earnings of $1.54 per share on
$781.5 million in revenue. On a conference call last night, Chief
Financial Officer Mark Widmer announced plans to reduce production
to 60% to 70% of capacity in response to slackening demand. For the
full year, FSLR slashed its net sales forecast to a range between
$3.5 billion and $3.8 billion, down from its earlier guidance of
$3.7 billion to $4.0 billion. FSLR is looking at a 7% drop right
out of the gate.
Elsewhere, STEC Inc. (STEC - 9.32) swung to a fourth-quarter
loss of $3.6 million, or 8 cents per share, down from a profit of
$17.5 million, or 34 cents per share, in the year-ago period.
Excluding items, STEC's loss narrowed to 2 cents per share, while
revenue fell by 38.1% to $58.1 million. The results were mixed, as
analysts were expecting a loss of 1 penny per share on sales of $56
million. Looking ahead, the company is forecasting a first-quarter
loss of 14 cents to 16 cents per share on revenue between $49
million and $51 million, while Wall Street is predicting a loss of
just 8 cents per share on sales of $48.4 million. STEC is trading
1.3% lower ahead of the bell.
Costco Wholesale Corporation (COST - 85.27) this morning
reported a fiscal second-quarter profit of $394 million, or 90
cents per share, a 13% year-over-year rise from $348 million, or 79
cents per share. Same-store sales rose 7%, while overall revenue
jumped 10% to $22.97 billion. The results came in above analysts'
expectations for earnings of 87 cents per share on $22.85 billion
in revenue. COST is set to open the session with a 2% lead.
Finally, DreamWorks Animation SKG, Inc. (DWA - 19.65) said its
fourth-quarter profit fell 72% to $24.3 million, or 29 cents per
share, from last year's earnings of $85.2 million, or 99 cents per
share, as respectable DVD sales of
Kung Fu Panda 2
couldn't quite compete with challenging year-ago comparisons.
Revenue was also on the decline, dropping 21% to $219 million. The
bottom-line results missed analysts' expectations for earnings of
32 cents per share; however, revenue surpassed Wall Street's
forecast of $207.5 million. DWA is down nearly 9% in pre-market
trading.
Earnings Preview
Today's earnings docket will also feature reports from Finisar (
FNSR
), Joy Global (
JOY
), Liz Claiborne (
LIZ
), McDermott International (
MDR
), PetSmart (PETM), SodaStream International (SODA), Staples
(SPLS), and Yingli Green Energy (YGE). Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The revised fourth-quarter GDP estimate will hit the Street
today, along with the Chicago 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 1,258,806 call contracts traded on Tuesday, compared to
719,913 put contracts. The resultant single-session put/call ratio
arrived at 0.57, while the 21-day moving average was 0.61.
Overseas Trading
Stocks in Asia ended mostly higher today, as traders looked
eagerly ahead to a planned liquidity-boosting maneuver by the ECB.
Additionally, government data showed a stronger-than-forecast 2%
rise in Japan's industrial production last month, as well as an
upwardly revised outlook for February. However, Shanghai-listed
securities finished in the red, after government officials
reaffirmed their allegiance to existing property curbs --
effectively dousing cold water on reports of a possible easing
move. By the close, South Korea's Kospi added 1.3%, Hong Kong's
Hang Seng advanced 0.5%, Japan's Nikkei edged up 0.01%, and China's
Shanghai Composite retreated roughly 1%.
It's a wobbly session in Europe at midday, after the ECB doled
out a larger-than-anticipated 529.5 billion euros to 800 regional
banks during its second round of long-term refinancing. With a
healthy amount of optimism over the long-term refinancing operation
(LTRO) already priced in, traders are now taking a cautious stance
ahead of today's U.S. economic data, which includes a
fourth-quarter GDP revision. At last look, London's FTSE 100 is
down 0.07%, the French CAC 40 has added 0.4%, and the German DAX is
up 0.5%.
Currencies and Commodities
The U.S. dollar index has retreated this morning, with the
greenback 0.1% lower at last check to trade at $78.20. Crude oil,
however, is on the rebound, with the front-month contract up 0.5%
at $107.04 per barrel. Gold futures, meanwhile, are on pace to
pare a fraction of yesterday's gains
, with the malleable metal down 0.02% at $1,788.00 an ounce.
Unusual Put and Call Activity:
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