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Futures Lower as Greece Takes the Spotlight

By: Schaeffer's Investment Research
Posted: 3/6/2012 8:30:00 AM
Referenced Stocks: ALOG;AVAV;CPK;MAKO;P

Wall Street's nerves are rattled this morning, as global economic fears have taken the forefront. With China's downwardly revised growth target , and a greater-than-anticipated contraction in the euro-zone purchasing managers index (PMI) still fresh in traders' minds, all three major market indexes are set to continue their trek into the red . Adding to the negative mood are concerns that not enough private creditors will participate in Greece's impending bond swap, putting the struggling nation once again at risk for default. The debt holders have until Thursday to consent to a 53.5% haircut on their Greek bonds. Against this skittish backdrop, the Dow Jones Industrial Average (DJIA) is set to plunge 70 points right out of the gate, while the broader S&P 500 Index is looking at a 9-point drop.

Dow, S&P and Nasdaq futures

In earnings news, Dick's Sporting Goods (DKS - 45.57) raked in a fourth-quarter profit of $111.1 million, or 88 cents per share, up from last year's earnings of $87.5 million, or 71 cents per share. Meanwhile, revenue improved 6.1% to $1.61 billion, as a decline in same-store sales at brick-and-mortar Dick's locations was offset by strength in the retailer's online business. The results fell right in line with analysts' expectations. For the full fiscal year, DKS anticipates a profit of $2.38 to $2.41 per share, compared to the consensus estimate of $2.40 per share. DKS is 2.4% lower ahead of the bell.

Elsewhere, VeriFone Systems (PAY - 46.55) reported a fiscal first-quarter loss of $3.1 million, or 3 cents per share, down from its profit of $32.0 million, or 35 cents per share, in the comparable quarter of 2011. Excluding items, earnings came in at 58 cents per share, while revenue rose by 49.7% to $425.2 million. Analysts, on average, were expecting a profit of 52 cents per share on sales of $417.5 million. Looking ahead, the company raised its full-year earnings forecast to a range between $2.60 and $2.66 per share, up from its earlier guidance of $2.53 to $2.60 per share. PAY is up 0.5% in pre-market trading.

Finally, NutriSystem, Inc. (NTRI - 11.88) swallowed a fourth-quarter loss of $1.2 million, or 4 cents per share, versus last year's profit of $7.1 million, or 25 cents per share. Revenue for the quarter fell to $66.9 million, down 24% from $87.9 million in the year-ago quarter. The results were mixed, as analysts were calling for a slimmer loss of 2 cents per share on $64.4 million in sales. Going forward, NTRI is calling for a current-quarter loss of 5 cents to 10 cents per share, compared to Wall Street's expectations for earnings of 10 cents per share. NTRI is set to drop 11% right out of the gate.

Earnings Preview

Today's earnings docket will also feature reports from AeroVironment ( AVAV ), Analogic ( ALOG ), Chesapeake Utilities ( CPK ), MAKO Surgical ( MAKO ), Pandora Media ( P ), Shuffle Master (SHFL), STAAR Surgical (STAA), United Natural Foods (UNFI), and Vail Resorts (MTN). Keep your browser at for more news as it breaks.

Economic Calendar

While there are no economic reports of note today, Wednesday's jam-packed docket brings us weekly crude inventories, ADP's private-sector payrolls figure for February, fourth-quarter productivity, and the Federal Reserve's consumer credit report. Jobs data continues to trickle in on Thursday, when we'll hear the regularly scheduled update on initial unemployment claims. We'll wrap up the week 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 991,630 call contracts traded on Monday, compared to 727,007 put contracts. The resultant single-session put/call ratio arrived at 0.73, while the 21-day moving average was 0.62.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets finished south of breakeven today, as Monday's softer growth forecast from China applied pressure to stocks across the board. Steel and aluminum issues were among the hardest hit, with traders pricing in expectations for lower infrastructure spending from the key emerging economy. Meanwhile, insurance company AIA Group continued to struggle in Hong Kong, after American International Group (AIG) priced its stock offering at the low end of its projected range. By the close, Hong Kong's Hang Seng lost 2.2%, China's Shanghai Composite fell 1.4%, South Korea's Kospi declined 0.8%, and Japan's Nikkei shed 0.6%.

European equities are also in the red, with resource stocks and automakers leading the way amid anxiety over China's tamer economic forecast. Traders are also on edge ahead of the Thursday deadline for Greece's private bond holders to participate in a debt restructuring swap, as any snags in the process could endanger the country's bailout funding. At last check, France's CAC 40 is down 1.5%, the German DAX is 1.4% lower, and London's FTSE 100 is off 1%.

Overseas markets

Currencies and Commodities

The U.S. dollar index has gained momentum this morning, with the greenback last seen 0.5% higher at $79.71. Conversely, crude oil is in retreat mode, with the front-month contract down 0.5% to trade at $106.19 per barrel. Gold futures continue to pull back , with the malleable metal 0.9% lower at $1,689.30 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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Unusual options activity - puts

Unusual options activity - calls

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