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Opening View: DJIA Pointed Higher on China GDP; Financials in the Earnings Spotlight

By: Schaeffer's Investment Research
Posted: 1/17/2012 8:15:00 AM
Referenced Stocks: AMTD;C;FRX;GDP;WFC

The long holiday weekend apparently refreshed the bulls, with U.S. stocks pointed higher ahead of the bell. Data from China is luring buyers from the sidelines, with traders digesting the country's latest gross domestic product ( GDP ) figures. On the home front, meanwhile, Wall Street is waiting to kick off a week chock-full of financial-related earnings reports , with TD Ameritrade ( AMTD ), Citigroup ( C ), and Wells Fargo ( WFC ) among the companies in today's spotlight. Against this backdrop, the Dow Jones Industrial Average (DJIA) is headed for a triple-digit lead out of the gate.

Dow, S&P and Nasdaq futures

In equities news, Carnival Corp. (CCL - 34.28) is bracing for a 17.8% drop in the first session since its Costa Concordia cruise ship capsized off the coast of Italy. According to the latest reports, 29 people -- four crew members and 25 passengers -- are still missing from the vessel. Furthermore, the liner's captain reportedly defied orders to return on board and oversee rescue operations. Ahead of the bell, no fewer than three analysts have downgraded and/or lowered their price targets on CCL.

In earnings news, TD Ameritrade (AMTD - 16.30) was the first of many financial firms to step into the spotlight this week. Before the open, the company reported a fourth-quarter profit of $152 million, or 27 cents per share, compared to a year-ago profit of $145 million, or 25 cents per share. Revenue, meanwhile, remained relatively flat at $653.4 million. Analysts, on average, were anticipating a profit of 26 cents per share on sales of $671.5 million. At last check, AMTD is set to open slightly lower.

Earnings Preview

Today's earnings docket will also feature reports from Citigroup ( C ), Wells Fargo ( WFC ), Forest Laboratories ( FRX ), McMoRan Exploration (MMR), Cree (CREE), and Linear Technology (LLTC). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar kicks off the holiday-shortened week with the Empire State manufacturing index. On Wednesday, Wall Street will see the Labor Department's producer price index (PPI) and core PPI, as well as the Fed's monthly report on industrial production and capacity utilization. The regularly scheduled report on weekly jobless claims will hit the Street on Thursday, as well as the holiday-delayed crude inventories data, the Philly Fed manufacturing index, monthly housing starts and building permits, and December's consumer price index (CPI) and core CPI. Finally, Friday wraps up with the latest data on existing home sales.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,187,252 call contracts traded on Friday, compared to 721,204 put contracts. The resultant single-session put/call ratio arrived at 0.61, while the 21-day moving average was 0.67.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended firmly higher today, thanks to a solid dose of economic data out of Beijing. China's GDP rose by 8.9% during the fourth quarter, besting expectations for a more modest rise of 8.7%. While stronger than forecast, the GDP gain was actually the weakest showing in over two years -- suggesting policymakers may refrain from additional tightening measures in the short term. Traders on the mainland also cheered a healthy jump in retail sales, as well as a double-digit rise in industrial output. By the close, China's Shanghai Composite surged 4.2%, Hong Kong's Hang Seng added 3.2%, South Korea's Kospi climbed 1.8%, and Japan's Nikkei edged up 1.1%.

European markets are also pointed higher at midday, with equities displaying their resilience after Standard & Poor's Monday downgrade of the European Financial Stability Facility (EFSF). The bulls have been encouraged by a robust reading on German economic sentiment, along with cooling Spanish bond yields. At last look, the German DAX is up 1.8%, the French CAC 40 has gained 1.3%, and London's FTSE 100 has added 1.2%.

Overseas markets

Currencies and Commodities

The greenback has pulled back this morning, with the U.S. dollar index down about 0.7%. Meanwhile, crude futures have climbed back atop the century mark , with the front-month contract up 2% at $100.86 per barrel. Finally, gold futures are also on the rebound, with the malleable metal last seen 2% higher at $1,663.30 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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