Opening View: Futures Flat as Wall Street Weighs Euro-Zone Reports, Rare Apple Earnings Miss
After rebounding to notch a triple-digit win on Tuesday, the Dow Jones Industrial Average (DJIA) is trading closer to breakeven this morning. On one hand, optimists are clinging to hope that unconfirmed reports of a euro-zone rescue agreement between France and Germany are real, and are essentially shrugging off Moody's downgrade of Spain's government bond ratings. However, a rare earnings miss from tech titan Apple Inc. ( AAPL ) has deflated more than a few bulls, and has pressured the tech-rich Nasdaq Composite (COMP) modestly lower ahead of the bell. Against this backdrop -- and with a plethora of additional earnings reports and economic data slated for release -- the major market indexes are set to take diverging paths out of the gate.
As previously mentioned, Apple Inc. (AAPL - 422.24) last night reported weaker-than-anticipated fiscal fourth-quarter earnings, despite significant jumps in iPad and Mac sales. Specifically, the iPhone maker said quarterly earnings rose a year-over-year 54% to $6.62 billion, or $7.05 per share, while sales increased 39% to $28.27 billion. Analysts, on average, were expecting fourth-quarter earnings of $7.39 per share on revenue of $29.69 billion. Looking ahead, the tech titan said it expects fiscal first-quarter earnings of about $9.30 per share on revenue of $37 billion, compared to analysts' projections for a per-share profit of $9.01 on sales of $36.72 billion. At last check, AAPL is flirting with a 5% drop at the open.
Elsewhere in earnings news, Intel (INTC - 23.40) reported a stronger-than-expected third-quarter profit of $3.47 billion, or 65 cents per share, up 17% from its year-ago earnings of $2.96 billion, or 52 cents per share. On an adjusted basis, the tech company said it earned 69 cents per share. Meanwhile, net revenue for the quarter climbed 28% to $14.3 billion. Analysts were expecting INTC to report earnings of 61 cents per share on revenue of $13.9 billion. For the fourth quarter, INTC forecast revenue of $14.2 billion to $15.2 billion, while the Street is predicting sales of $14.23 billion. Ahead of the bell, INTC is set to open 3.7% higher.
Juniper Networks (JNPR - 21.41) reported a third-quarter profit of $83.7 million, or 16 cents per share - down 38% from its year-ago profit of $134.5 million, or 25 cents per share. On an adjusted basis, JNPR earned 28 cents per share, while revenue rose 9.2% year-over-year to $1.11 billion. The results fell just shy of bottom-line expectations, as analysts had projected earnings of 28 cents per share on sales of $1.09 billion. Looking ahead, the company forecast fourth-quarter earnings of 32 cents to 36 cents per share on revenue of $1.16 billion to $1.22 billion. Analysts, on average, are calling for a fourth-quarter profit of 36 cents per share on sales of $1.23 billion. In pre-market trading, JNPR has given up 2.1%.
Finally, Yahoo (YHOO - 15.47) reported a third-quarter profit of $293.3 million, or 23 cents per share, down 26% from $396.1 million, or 29 cents per share, in the year-ago period. Excluding items, YHOO's profit arrived at 21 cents per share, which was a 32% increase over last year's adjusted earnings of 16 cents per share. Analysts had expected an adjusted profit of 17 cents per share. Meanwhile, net revenue declined 5% to $1.07 billion, right in line with Wall Street's expectations. Looking ahead, the company is expecting fourth-quarter net revenue to range between $1.13 billion and $1.24 billion, while analysts are forecasting revenue of $1.22 billion. At last check, YHOO is headed for a 4.2% lead out of the gate.
Today's earnings docket will also feature reports from American Express ( AXP ), AMR Corp. ( AMR ), Amylin Pharmaceuticals ( AMLN ), Apollo Group ( APOL ), Bank of New York Mellon (BK), BlackRock (BLK), Buffalo Wild Wings (BWLD), Cheesecake Factory (CAKE), Cirrus Logic (CRUS), E*Trade Financial (ETFC), eBay (EBAY), Freeport McMoRan Copper & Gold (FCX), Morgan Stanley (MS), PNC Financial Services (PNC), Riverbed Technology (RVBD), SLM Corp. (SLM), Travelers Companies (TRV), United Technologies (UTX), U.S. Bancorp (USB), and Western Digital (WDC) . Keep your browser at SchaeffersResearch.com for more news as it breaks.
Today's docket features the consumer price index (CPI) and core CPI for September, along with last month's housing starts, weekly crude inventories, and the Fed's Beige Book report for October. The usual report on weekly jobless claims is due out Thursday, as well as existing home sales for September, the October Philadelphia Fed index, and the Conference Board's index of leading economic indicators. There are no major economic reports scheduled for Friday.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,059,472 call contracts traded on Tuesday, compared to 662,125 put contracts. The resultant single-session put/call ratio arrived at 0.62, while the 21-day moving average was 0.71.
Stocks in Asia ended mostly higher today, boosted by reports that euro-zone leaders have reached a deal to expand the size of the European Financial Stability Facility (EFSF). Later in the session, investors' enthusiasm was tempered by conflicting reports that no such decision has yet been reached. Meanwhile, the tech sector struggled amid ongoing flooding at Thai manufacturing facilities, as well as poorly received earnings from Apple. Nevertheless, most regional benchmarks finished in the black, bouncing back from Tuesday's losses. By the close, Hong Kong's Hang Seng added 1.3%, South Korea's Kospi rose 0.9%, Japan's Nikkei gained 0.4%, and China's Shanghai Composite slipped 0.3%.
European markets are on the upswing at midday, with traders relatively unruffled by a Moody's downgrade of Spanish debt. Although more than one European Union (EU) official has dismissed speculation that a deal to bolster the EFSF has been reached, hopes seem to be running high that additional aid measures will be implemented at this weekend's summit of EU leaders. As a result, banking stocks are helping to lead the advance. At last check, the German DAX is up 0.7%, while both London's FTSE 100 and the French CAC 40 have tacked on 0.8%.
Currencies and Commodities
The greenback has given up some ground this morning, with the U.S. dollar index down 0.6% at last look. Elsewhere, crude futures have extended their journey north of $88 per barrel , with the front-month contract tacking on 0.5% ahead of the bell. On the flip side, gold futures are on the rebound after surrendering 1.4% yesterday , with the malleable metal last seen fractionally higher at $1,653 an ounce.
Unusual Put and Call Activity:
Unusual Put and Call Activity:
Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.