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Stocks Trending Lower as China, Germany Weigh on the Street
3/22/2012 8:25:00 AM
By: Schaeffer's Investment Research
Stocks are pointed south ahead of the bell, after manufacturing indexes from China and Germany suggested weaker factory activity in both overseas nations. The readings have left Wall Street on edge, bolstering fears that a slowdown in China's growth could present a potential burden for the global economy in the foreseeable future. Back home, economic data continues to trickle in, with weekly jobless claims and the Federal Housing Finance Agency (FHFA) home price index on tap in today's session. However, a week's worth of wishy-washy housing reports have put traders in a tizzy. With gloomy overseas data setting the tone, futures on all three major market indexes are trading below breakeven.
In earnings news, Shoe Carnival (SCVL - 26.50) reported a fourth-quarter profit of $3.3 million, or 24 cents per share, down 25% from $4.4 million, or 33 cents per share, in the year-ago period. The company attributed the decline to unseasonably warm weather, which negatively impacted boot sales. Meanwhile, revenue rose by 1.1% to $181.9 million, despite a 3% decrease in same-store sales. The results topped analysts' expectations for earnings of 21 cents per share on sales of $180.9 million. Looking ahead, the shoe retailer is forecasting a fiscal first-quarter profit of 75 cents to 78 cents per share on revenue between $219 million and $222 million. Wall Street, on the other hand, is predicting earnings of just 70 cents per share on sales of $207.7 million. SCVL is set to open the session 9.8% higher.
Discover Financial Services (DFS - 31.64) posted a fiscal first-quarter profit of $631 million, or $1.18 per share, a 36% jump from its year-ago profit of $465 million, or 84 cents per share. Total revenue rose to $1.84 billion from last year's $1.73 billion, as credit card sales volume improved by 7%, and the rate of delinquent payments fell to 2.2%. The results came in better than expected, with analysts calling for earnings of 94 cents per share on $1.82 billion in sales. DFS is down 0.5% ahead of the bell.
Finally, FedEx (FDX - 95.82) banked a fiscal third-quarter profit of $521 million, or $1.65 per share, up from last year's earnings of $231 million, or 73 cents per share. On an adjusted basis, FDX raked in $1.55 per share, while revenue climbed 9% to $10.56 billion. Analysts, on average, were looking for a profit of just $1.35 per share on $10.62 billion in revenue. For the full fiscal year, FDX expects to earn $6.43 to $6.68 per share, topping Wall Street's consensus estimate of $6.36 per share. FDX is 0.4% lower in pre-market trading.
Today's earnings docket will also feature reports from Accenture ( ACN ), ConAgra Foods ( CAG ), Cost Plus ( CPWM ), Dollar General ( DG ), ENGlobal ( ENG ), GameStop (GME), IHS (IHS), Lululemon Athletica (LULU), Micron Technology (MU), Nike (NKE), Silver Wheaton (SLW), Steelcase (SCS), UTi Worldwide (UTIW), and The Wet Seal (WTSLA). Keep your browser at SchaeffersResearch.com for more news as it breaks.
Today brings us the latest data on initial and continuing jobless claims, the Conference Board's index of leading economic indicators, and the FHFA home price index. A week chock-full of economic data wraps up on Friday with new home sales.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,242,444 call contracts traded on Wednesday, compared to 695,494 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average was 0.62.
Stocks in Asia ended mixed today, as traders considered another dose of disappointing data from China. HSBC's flash purchasing managers index (PMI) fell to 48.1 in March, marking the fifth straight month of shrinking factory activity. The news applied pressure to stocks with international exposure, including Japanese industrial issues and Korean shipbuilders. However, Tokyo-listed stocks ended higher after Japan unveiled a surprise trade surplus for February, as rising demand from the U.S. offset weaker exports to China. By the close, China's Shanghai Composite gave up 0.1%, South Korea's Kospi shed 0.05%, Hong Kong's Hang Seng tacked on 0.2%, and Japan's Nikkei advanced 0.4%.
European equities are planted south of breakeven, as a three-month low in Markit's composite euro-zone PMI has sparked some economic jitters. Meanwhile, shares of Randgold Resources have plummeted in the U.K., down roughly 13% after a military coup in the African nation of Mali raised concerns over potential output interruptions. At last check, the French CAC 40 is down 1.6%, the German DAX is down 1.5%, and London's FTSE 100 has lost 0.9%.
Currencies and Commodities
The greenback is continuing its push higher this morning , with the U.S. dollar index up 0.2% at $79.81. Conversely, crude oil is on track to pare some of yesterday's gains, with the front-month contract 1.1% lower ahead of the bell at $106.10 per barrel. Gold futures are pointed south, as well, with the malleable metal set to drop 0.8% to $1,636.50 an ounce.
Unusual Put and Call Activity:
Unusual Put and Call Activity:
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