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Opening View: DJIA Cautiously Lower as Wall Street Awaits Payrolls Report
By: Schaeffer's Investment Research
U.S. stocks are trading cautiously lower ahead of the bell, as Wall Street awaits the government's highly anticipated nonfarm payrolls report. Ahead of the data -- which is expected to show roughly 60,000 jobs added in September -- news from overseas has also cast a gloomy tone. Specifically, Moody's cut its ratings on a slew of British banks, noting their reliance on the U.K. government's support. Against this backdrop, the Dow Jones Industrial Average (DJIA) is in danger of snapping its winning streak , with the blue-chip barometer lingering 41 points below fair value.
In earnings news, Illumina (ILMN - 39.93) last night reported preliminary third-quarter revenue of $235 million, well short of analysts' expectations for $278 million. "In the quarter, we saw what we believe to be an unprecedented slowdown in purchasing due to uncertainties in research funding and overall economic conditions, as well as a temporary excess of sequencing capacity in the market," explained President and CEO Jay Flatley. The genetic analysis specialist also suspended its fiscal 2011 financial guidance, citing those very same "market uncertainties" as the catalyst. ILMN intends to provide further details when it reports its full third-quarter results after the close on Tuesday, Oct. 25. At last check, ILMN is set to start the session with a 29% drop.
Elsewhere, AngioDynamics (ANGO - 14.27) said its fiscal first-quarter profit fell 27% to $1.4 million, or 5 cents per share, from its year-ago earnings of $1.9 million, or 8 cents per share. On an adjusted basis, ANGO earned 8 cents per share, while revenue improved 5.7% to $54.4 million. The results fell roughly in line with expectations, as analysts were looking for a profit of 8 cents per share on $53.9 million in revenue. The firm also backed its forecast for adjusted full-year earnings of 41 cents to 49 cents per share, encompassing Wall Street's view for a profit of 43 cents per share.
Finally, ServiceSource International (SREV - 13.35) last night raised its third-quarter and full-year sales guidance. Specifically, the software company said it now expects third-quarter revenue of more than $49 million, compared to its previous projections for sales between $45 million and $46 million. For the full year, SREV forecast revenue of more than $195 million, up from its prior guidance for sales of $190 to $192 million. Ahead of the bell, the shares of SREV are pointed 12% higher.
We'll round out the week with the Labor Department's nonfarm payrolls report for September, though the Street will also digest wholesale inventories and consumer credit for August.
Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 934,752 call contracts traded on Thursday, compared to 641,683 put contracts. The resultant single-session put/call ratio arrived at 0.69, while the 21-day moving average was 0.72.
On the other hand, traders in Europe seem a little jittery at midday. A negative note from Moody's helped to spark some anxiety, after the firm downgraded its ratings on 12 U.K. financial firms and nine Portuguese banking institutions. Additionally, unconfirmed reports indicate that France and Germany are at odds over how to shore up battered European banks, with talks expected to continue into the weekend. At last check, the French CAC 40 is off 0.3%, the German DAX is down almost 0.1%, and London's FTSE 100 is trading fractionally lower.
Currencies and Commodities
The greenback is trading modestly lower this morning, with the U.S. dollar index down 0.2% at last check. Elsewhere, crude futures have pared their recent gains, with the front-month contract down 0.3% to trade near $82.33 per barrel. Gold futures, on the other hand, are headed for their third straight win. At last look, the malleable metal has tacked on $3.60, or 0.2%, to flirt with $1,656.80 an ounce.
Unusual Put and Call Activity:
Unusual Put and Call Activity:
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