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Opening View: DJIA Flat Ahead of Jobless Claims, Bernanke Speech

Posted
2/2/2012 8:13:00 AM
By: Schaeffer's Investment Research
Referenced Stocks:AGN;IP;K;MA;MRK

After yesterday's data-induced rally , stocks are taking a breather this morning, with futures flat ahead of the bell. On the heels of yesterday's promising employment and manufacturing reports , investors are cautiously awaiting the results of today's weekly jobless claims and testimony from Fed Chairman Ben Bernanke. With a slew of earnings releases on tap, as well as tomorrow's ever-important nonfarm payrolls, Wall Street is anticipating a flood of information. Against this busy backdrop, both the Dow Jones Industrial Average (DJIA) and the broader S&P 500 Index (SPX) are set to open with marginal losses.

Dow, S&P and Nasdaq futures

After Wednesday's close, Facebook raised the curtain on its long-awaited initial public offering (IPO). According to paperwork filed with the Securities and Exchange Commission (SEC), Facebook earned $1 billion last year, with revenue arriving at $3.7 billion. The social networking site did not specify how many shares it would sell in its offering, or at what price, but the "placeholder" value of the IPO is currently pegged at $5 billion -- right in line with the prevailing market speculation. Facebook will trade under the ticker FB, although the company has yet to determine whether it will trade on the New York Stock Exchange or the Nasdaq.

In earnings news, Green Mountain Coffee Roasters Inc. (GMCR - 53.63) banked a fiscal first-quarter profit of $104.4 million, or 66 cents per share, a marked improvement over last year's profit of $2.4 million, or 2 cents per share. Excluding items, earnings rose a year-over-year 233% to 60 cents per share. Thanks to surging sales in its K-Cup line, revenue soared 102% to $1.16 billion. The results came in far above analysts' expectations for adjusted earnings of 36 cents per share on $1.06 billion in revenue. Looking ahead, GMCR is calling for adjusted second-quarter earnings of 60 cents to 65 cents per share on sales growth of 45% to 50%. The outlook is more cautious than Wall Street's projection for a per-share profit of 73 cents on 59% revenue growth. GMCR is set to soar today, trading 22% higher in pre-market action.

Elsewhere, Chipotle Mexican Grill (CMG - 370.41) reported a fourth-quarter profit of $57.5 million, or $1.81 per share, up 23.7% from $46.4 million, or $1.47 per share, in the year-ago period. Meanwhile, revenue rose 24% to $596.7 million, boosted by an 11.1% increase in same-store sales. The results were mixed, as analysts, on average, expected a healthier profit of $1.83 per share on revenue of $591.2 million. CMG is down 2% ahead of the bell.

Finally, thanks to strong revenue from its Asia-based properties, Las Vegas Sands (LVS - 50.18) said its fourth-quarter earnings increased 34% to $435.3 million, or 39 cents per share, from last year's profit of $325.5 million, or 34 cents per share. On an adjusted basis, earnings rose to 57 cents from 42 cents per share. Revenue increased 26% to $2.54 billion. LVS' bottom-line results fell right in line with analysts' estimates, while revenue surpassed expectations of $2.47 billion. LVS was last seen 1% lower.

Earnings Preview

Today's earnings docket will also feature reports from International Paper ( IP ), Kellogg ( K ), MasterCard ( MA ), Merck ( MRK ), Allergan ( AGN ), Gilead Sciences (GILD), Boston Scientific (BSX), Cardinal Health (CAH), Beazer Homes (BZH), M/I Homes (MHO), Blackstone Group (BX), Acme Packet (APKT), NetSuite (N), Cavium (CAVM), Digital River (DRIV), CME Group (CME), Diamond Offshore Drilling (DO), Sunoco (SUN), Dow Chemical (DOW), Edwards Lifesciences (EW), Genworth Financial (GNW), New York Times (NYT), Royal Caribbean Cruises (RCL), and Starwood Hotels & Resorts (HOT). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today's docket is relatively light, featuring the regularly scheduled data on weekly jobless claims. Finally, the Labor Department's marquee report on nonfarm payrolls will dominate headlines on Friday, and traders will also digest the latest data on factory orders and the ISM's services index.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,366,876 call contracts traded on Wednesday, compared to 843,124 put contracts. The resultant single-session put/call ratio arrived at 0.62, while the 21-day moving average was 0.60.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets ended higher today, following suit with Wall Street's Wednesday rally. In Japan, automakers Toyota and Honda gained ground after reporting healthy January sales figures, while investment giant Nomura surged on the heels of its stronger-than-expected quarterly earnings figures. Commodity stocks were also among the day's notable advancers, thanks to well-received manufacturing reports from the U.S. and Europe. By the close, Japan's Nikkei added 0.8% and South Korea's Kospi rose 1.3%, while China's Shanghai Composite and Hong Kong's Hang Seng gained 2% apiece.

On the other hand, European equities are modestly lower at midday, despite some initial enthusiasm over a potential Glencore-Xstrata merger. Bulls were spooked by a gloomy outlook from consumer products company Unilever, along with earnings misses from the likes of AstraZeneca, Deutsche Bank, and Royal Dutch Shell. At last check, the French CAC 40 is down 0.03%, the German DAX is off 0.05%, and London's FTSE 100 has dipped 0.3%.

Overseas markets

Currencies and Commodities

The greenback is headed higher this morning, with the U.S. dollar index up 0.3% at $79.15. Crude oil, on the other hand, is looking to extend its stay in the red, with the front-month contract down 1.1% to trade at $96.54 per barrel. Elsewhere, gold futures are on track to pare some of their recent gains , with the malleable metal last seen 0.1% lower at $1,747.10 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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