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Opening View: Ahead of Data, DJIA, SPX Set to Follow Europe Higher
12/22/2011 8:18:00 AM
By: Schaeffer's Investment Research
U.S. stocks are following European markets higher this morning, extending yesterday's eleventh-hour bounce . A lightly populated Wall Street will soon digest the latest batch of economic data, with weekly jobless claims, gross domestic product ( GDP ) estimates, and consumer confidence stats on tap. In the meantime, a handful of companies have stepped into the earnings confessional, with Bed Bath & Beyond ( BBBY ) and Micron Technology ( MU ) among the notables in the spotlight today. At last check, the Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) are poised to add to their weekly gains of 2%.
On the earnings front, Bed Bath & Beyond (BBBY - 61.43) reported third-quarter earnings of $228.5 million, or 95 cents per share, representing a 21% rise over last year's earnings of $188.6 million, or 74 cents per share. Revenue improved 6.8% on a year-over-year basis to $2.34 billion. The bottom-line results came in better than expected, as analysts were forecasting earnings of 88 cents per share on $2.35 billion in sales. Looking forward, BBBY is anticipating a fourth-quarter profit of $1.28 to $1.33 per share, and increased its full-year outlook to a range between $3.86 and $3.92 per share. By comparison, analysts are calling for fourth-quarter earnings of $1.30 per share, and fiscal 2011 earnings of $3.83 per share. In pre-market trading, BBBY is down 3%.
After the close last night, Micron Technology (MU - 5.54) reported a fiscal first-quarter loss of $187 million, or 19 cents per share, down from its profit of $155 million, or 15 cents per share, in the year-ago period. Meanwhile, net sales fell 7.2% to $2.09 billion, due to a 12% decline in average selling prices for DRAM chips, and a 10% drop in prices for NAND flash memory chips. Analysts, on average, were expecting a loss of just 7 cents per share on revenue of $2.13 billion. At last look, MU is set to open 1.6% higher.
In equities news, Akamai Technologies (AKAM - 26.67) agreed to acquire Cotendo Inc., which makes mobile-network acceleration software, for roughly $268 million in cash. AKAM expects the deal to close in the first half of 2012. "As we look to accelerate growth across the dynamic landscapes of cloud and mobile optimization, we are excited to be joining forces with Cotendo," said Akamai President and CEO Paul Sagan. Ahead of the bell, AKAM is 0.4% higher.
Today's earnings docket will feature reports from American Greetings ( AM ), Neogen ( NEOG ), CalAmp (CAMP), and Christopher & Banks (CBK). Keep your browser at SchaeffersResearch.com for more news as it breaks.
The economic calendar heats up with the release of the weekly jobless figures, the Thomson Reuters/University of Michigan consumer sentiment index, the Conference Board's index of leading economic indicators, and the government's latest estimate on third-quarter GDP. Finally, we head into the long holiday weekend with data on durable goods, personal income and spending, and new home sales for November.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 781,355 call contracts traded on Wednesday, compared to 568,110 put contracts. The resultant single-session put/call ratio arrived at 0.73, while the 21-day moving average was 0.71.
Stocks in Asia ended lower across the board today, as traders were less than impressed by record-setting central bank loans in the euro zone . Tech issues helped pace the regional decline, thanks in part to poorly received earnings from U.S. software firm Oracle . Meanwhile, Toyota turned lower in Tokyo, with Moody's warning of a potential downgrade after the automaker confessed to disappointing sales results for calendar year 2011. By the close, Japan's Nikkei shed 0.8%, China's Shanghai Composite and Hong Kong's Hang Seng each lost 0.2%, and South Korea's Kospi gave up 0.05%.
On the other hand, the major European indexes are pointed higher at midday. Equities are looking to erase Wednesday's losses, with banking names and tech stocks rebounding from the prior session's heavy selling. However, traders haven't completely rediscovered their risk appetites, as defensive issues -- including pharmaceuticals and grocery stocks -- are among the day's notable gainers. At last look, the French CAC 40 is up 1.6%, London's FTSE 100 has added 1.1%, and the German DAX has risen 1.2%.
Currencies and Commodities
The greenback is paring yesterday's gains this morning, with the U.S. dollar index down 0.2%. Crude oil, meanwhile, has continued its recent ascent, with the front-month contract last seen 0.4% higher at $99.05 per barrel. On the flip side, gold futures have extended their pullback, with the malleable metal fractionally lower to trade at $1,612.70 an ounce.
Unusual Put and Call Activity:
Unusual Put and Call Activity:
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