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Opening View: DJIA Pointed Cautiously Lower on Euro-Zone Debt Concerns

By: Schaeffer's Investment Research
Posted: 1/11/2012 8:25:00 AM
Referenced Stocks: AAPL;CROX;LEDS;LEN;SVU

U.S. stocks are pointed modestly lower this morning, with the bulls taking a breather in the face of lingering concerns about European debt. Specifically, Fitch Ratings reportedly called on the European Central Bank (ECB) to do more to avert a "cataclysmic" euro-zone collapse , which -- along with a fourth-quarter economic contraction in Germany -- has weighed on stocks both at home and abroad. On this side of the pond, investors are also awaiting the Federal Reserve's Beige Book -- set to hit the Street at 2 p.m. EST -- but are biding their time by digesting headlines surrounding Eastman Kodak (EK), Apple Inc. ( AAPL ), and Crocs ( CROX ), to name a few. At last check, the Dow Jones Industrial Average (DJIA) is set to open with a 38.5-point drop, while the broader S&P 500 Index (SPX) is lingering 5.4 points south of fair value.

Dow, S&P and Nasdaq futures

In equities news, cash-strapped Eastman Kodak (EK - 0.60) filed patent lawsuits against Apple Inc. (AAPL - 423.24) and HTC Corp. in the U.S. District Court in Rochester, N.Y., and at the International Trade Commission in Washington, D.C. Separately, EK said it's dividing its film group into its two other business units, creating two business segments from the current three. In pre-market trading, EK is set to soar 15.3%, while AAPL is trading 0.3% lower.

In earnings news, Crocs, Inc. (CROX - 15.95) last night said its fourth-quarter revenue will be at the high end of its guidance of $200 million to $205 million. For comparison, Wall Street is calling for current-quarter revenue of $204.5 million. Furthermore, the footwear concern said it expects full-year sales to exceed $1 billion for the first time ever, topping analysts' expectations. The company is slated to unveil its fourth-quarter and full-year figures in late February. At last look, CROX is poised to open 5.3% higher.

Finally, Synnex (SNX - 32.09) reported a fourth-quarter profit of $50.2 million, or $1.37 per share, up from $37.5 million, or $1.04 per share, in the year-ago period. Meanwhile, revenue rose 15.1% to $2.84 billion. Analysts, on average, were expecting a profit of $1.14 per share on revenue of $2.82 billion. Looking ahead, the company is expecting first-quarter earnings between 89 cents and 93 cents per share on revenue ranging from $2.48 billion to $2.58 billion. This falls roughly in line with analysts' predictions for a profit of 89 cents per share on revenue of $2.55 billion. Ahead of the bell, SNX is flirting with a 4.4% lead.

Earnings Preview

Today's earnings docket will also feature reports from 99 Cents Only Stores (NDN), Lennar ( LEN ), SemiLEDs ( LEDS ), and SUPERVALU ( SVU ). Keep your browser at for more news as it breaks.

Economic Calendar

The Fed's Beige Book report will hit the Street today, and traders will also be treated to speeches from central bankers Charles Evans, Dennis Lockhart, and Charles Plosser. Thursday brings us the weekly update on jobless claims, accompanied by Commerce Department reports on business inventories and December retail sales. The week wraps up with the mid-month Thomson Reuters/University of Michigan consumer sentiment index, plus the Labor Department's report on the trade deficit and import/export prices.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,286,359 call contracts traded on Tuesday, compared to 735,292 put contracts. The resultant single-session put/call ratio arrived at 0.57, while the 21-day moving average was 0.69.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended mostly higher today, though widespread profit-taking sent Shanghai-listed equities to their first drop in four days. Resource-related securities paced the advancing equities in China, with Angang Steel adding 4.4% on the heels of a sector-wide upgrade to "overweight" at UOB KayHian. Elsewhere, shares of Nomura Holdings muscled 3.2% higher in Japan, despite a Wall Street Journal report suggesting a looming departure for the firm's joint deputy president. By the close, Japan's Nikkei tacked on 0.3%, Hong Kong's Hang Seng gained 0.8%, and China's Shanghai Composite gave back 0.4%.

Meanwhile, the major European benchmarks are lower at midday, after ratings agency Fitch reportedly nudged the ECB to increase its purchases of euro-zone debt to avoid a collapse of the euro. This news came just ahead of tomorrow's ECB meeting, where the committee is expected to keep interest rates at their current lows while holding back on any further monetary easing. Elsewhere, traders are also digesting the latest economic data from Germany, which showed the nation's economy grew 3% in 2011 - as expected - but contracted slightly in the final quarter of the year. At last look, the German DAX has fallen 0.4%, while the French CAC 40 and London's FTSE have each surrendered 0.6%.

Overseas markets

Currencies and Commodities

The greenback is on the rebound this morning, with the U.S. dollar index up about 0.6%. Meanwhile, crude futures have pared a portion of yesterday's gains , giving back 0.7% to trade near $101.58 per barrel. On the other hand, gold futures have continued their upward momentum, with the malleable metal last seen 0.2% higher to wink at $1,635 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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