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Futures Higher in Anticipation of Jobs Data, Greek Debt Swap

Posted
3/8/2012 8:30:00 AM
By: Schaeffer's Investment Research
Referenced Stocks:ALTR;ARO;BUD;CNQ;DYN

U.S stock futures are trekking north this morning, as Wall Street awaits a day chock-full of market-moving news. On the domestic front, unemployment claims will take the spotlight, ahead of tomorrow's delayed nonfarm payrolls report. Anticipation is high, as yesterday's promising ADP payrolls report stoked a fresh round of bullish sentiment. Across the pond, fears that any snags in Greece's debt swap could cause a disorderly default for the fiscally strapped nation have been seemingly contained, with roughly 60% of private investors indicating they will participate in the write-downs. Against this optimistic backdrop, all three major market indexes are on pace to continue with yesterday's positive price action .

Dow, S&P and Nasdaq futures

In earnings news, Hot Topic (HOTT - 8.79) swung to an adjusted fourth-quarter profit of $9 million, or 21 cents per share, from its year-ago loss of $5.1 million, or 12 cents per share. The company attributed this increase to a 3.2% climb in gross margins, as its cost-cutting efforts have started to gain traction. Meanwhile, net sales fell 1.2% to $209.9 million, despite a 1.3% rise in same-store sales. The results surpassed analysts' predictions for a profit of 20 cents per share on sales of $209.3 million. Looking ahead, HOTT is forecasting first-quarter earnings of 2 cents to 5 cents per share, while Wall Street is predicting that the retailer will break even. HOTT is up 7% in pre-market trading.

The Men's Wearhouse, Inc. (MW - 40.18) said its fourth-quarter loss narrowed to $3.8 million, or 7 cents per share, from last year's deficit of $14.1 million, or 27 cents per share, on fewer charges and higher domestic pricing. Excluding items, MW posted a slimmer loss of 5 cents per share. A 9.3% jump in same-store sales at the haberdasher's eponymous stores helped overall revenue improve 3.7% to $562.2 million. The results were mixed, with Wall Street predicting a loss of 13 cents per share on $563.2 million in sales. The Texas-based retailer is calling for current-quarter earnings of 53 cents to 54 cents per share, with analysts projecting a bolder per-share profit of 62 cents.

On the heels of last week's blowout same-store sales report, Buckle (BKE - 47.88) today unveiled a fourth-quarter profit of $56.1 million, or $1.18 per share -- up 13% from last year's earnings of $49.5 million, or $1.05 per share. Sales for the quarter improved 11% to $337.1 million, as online sales increased 31% to $27.6 million. The report was stronger than expected, with consensus estimates calling for a profit of $1.14 per share on $335.2 million in sales. BKE is trading 0.3% higher ahead of the bell.

Earnings Preview

Today's earnings docket will also feature reports from Aeropostale ( ARO ), Altera ( ALTR ), Anheuser Busch-InBev ( BUD ), Canadian Natural Resources ( CNQ ), Dynegy ( DYN ), Eagle Bulk Shipping (EGLE), Emergent BioSolutions (EBS), Fuel Systems Solutions (FSYS), JinkoSolar (JKS), Kirkland's (KIRK), Quiksilver (ZQK), Renren (RENN), Smith & Wesson (SWHC), Smithfield Foods (SFD), Suntech Power (STP), and Williams-Sonoma (WSM). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

We'll hear the regularly scheduled update on initial unemployment claims today. Tomorrow, the week wraps up on a busy note, with the delayed release of the Labor Department's nonfarm payrolls report for February, as well as the latest unemployment rate, the trade deficit, and wholesale inventories.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 965,535 call contracts traded on Wednesday, compared to 907,120 put contracts. The resultant single-session put/call ratio arrived at 0.63, while the 21-day moving average was 0.64.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets ended higher today, collecting their first daily win this week. Traders cheered an apparently strong commitment to Greece's debt swap among major bondholders, as well as the prospect of additional monetary easing by the U.S. Fed. Tech stocks also gained ground, with suppliers for Apple's (AAPL) newly launched 4G iPad leading the way. Meanwhile, over in China, insurers and resource issues recovered from steep losses earlier in the week. By the close, Japan's Nikkei jumped 2%, Hong Kong's Hang Seng gained 1.3%, China's Shanghai Composite advanced 1.1%, and South Korea's Kospi rose 0.9%.

Bulls have also taken the reins in Europe, where the Bank of England and European Central Bank have both opted to keep interest rates at their current record lows. Traders are optimistic that Greece will be able to pull off its massive restructuring initiative, with Bloomberg reporting that creditors holding 60% of the country's eligible debt are ready to participate. Among individual equities, EADS is on the upswing in Paris after the aerospace giant unveiled stronger-than-expected fourth-quarter earnings, and provided a promising forecast for fiscal 2012. At last check, the German DAX is up 2.1%, France's CAC 40 has surged 2%, and London's FTSE 100 is 1.3% higher.

Overseas markets

Currencies and Commodities

The greenback is trading lower this morning, with the U.S. dollar index down 0.6% at $79.27. Crude oil, on the other hand, is up 0.8% to flirt with $107 per barrel. Gold futures are on pace to tack on additional gains , with the malleable metal last seen 1% higher at $1,701 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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Unusual options activity - puts

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