After finishing higher for the first week in five, U.S. stocks are poised to pick up where they left off on Friday. Lingering optimism stemming from Federal Reserve Chairman Ben Bernanke's end-of-week speech has helped the bulls resume the reins, despite the central banker's ambiguous stance on another round of quantitative easing. In addition, Tropical Storm Irene's relatively tame path of destruction has also sparked optimism ahead of the bell, with domestic insurers like Travelers ( TRV ) gaining ground amid a collective sigh of relief. Against this backdrop, the Dow Jones Industrial Average (DJIA) is flirting with a triple-digit lead, while the S&P 500 Index (SPX) is trading about 13 points north of breakeven.
In earnings news, LDK Solar Co. Ltd. (LDK - 5.84) swung to a second-quarter net loss of $87.7 million, or 62 cents per American depositary share ( ADS ), from a net profit of $45 million, or 36 cents per ADS, in the year-ago quarter. Meanwhile, net revenue fell a year-over-year 12% to $499.4 million. Analysts, on average, were expecting the solar concern to record a narrower second-quarter loss of 25 cents per share on sales of $506.5 million. Furthermore, gross margins plummeted to 2.2%, from 18% a year earlier. Ahead of the bell, the shares of LDK are pointed 2.2% lower.
Elsewhere, Donaldson Company (DCI - 53.61) said fiscal fourth-quarter earnings jumped a year-over-year 29% to $65.8 million, or 84 cents per share. Meanwhile, sales soared 21% to $625.5 million. The results exceeded the Street's forecast for per-share earnings of 79 cents on revenue of $620 million. Looking ahead, the company projected full-year earnings of $3.15 to $3.45 per share on revenue of $2.45 billion to $2.6 billion. For comparison, analysts, on average, were calling for full-year earnings of $3.21 per share on sales of $2.52 billion.
In other news, Travelers (TRV - 48.30) is poised to open roughly 1.4% higher today, after Hurricane Irene proved to be less aggressive than expected. The storm's estimated cost to insurers fell to about $2.6 billion in the U.S., according to Kinetic Analysis Corp., compared to last week's estimates for damages of as much as $14 billion.
The economic calendar kicks off today with pending home sales for June, and personal income and spending stats for July. The S&P/Case-Shiller 20-city home price index for June, the Conference Board's consumer confidence index for July, and the minutes from the latest meeting of the Federal Open Market Committee (FOMC) are all set to hit the Street on Tuesday. Employment data starts to trickle in on Wednesday, with the release of ADP's private-sector payrolls report for August and the Challenger, Gray & Christmas update on monthly job cuts. Also due out are July's factory orders and the Chicago purchasing managers index ( PMI ) for August, as well as the usual update on weekly petroleum supplies. Initial jobless claims are due out on Thursday, as is the ISM manufacturing index for August. Also on the day's docket are July's construction spending and auto sales for August. The Labor Department's much-anticipated nonfarm payrolls report for August will be released ahead of the open on Friday, capping off our three-day deluge of jobs data.
Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 876,466 call contracts traded on Friday, compared to 639,332 put contracts. The resultant single-session put/call ratio arrived at 0.73, while the 21-day moving average was 0.81.
Most Asian markets ended higher today, with traders taking their cues from Friday's week-ending surge on Wall Street. Exporters set the bullish tone in Tokyo and Seoul, but Japanese-listed stocks pared their gains after Finance Minister Yoshihiko Noda was elected the country's sixth prime minister in the past five years. Meanwhile, Chinese equities sat out the day's rally, after financial regulators required banks to begin including margin deposits in their required reserves at the central bank. By the close, South Korea's Kospi added 2.8%, Hong Kong's Hang Seng rose 1.4%, Japan's Nikkei added 0.6%, and China's Shanghai Composite slid 1.4%.
European stocks are cautiously higher at midday, with financial issues setting the pace after a merger announcement from Eurobank and Alpha Bank. However, trading volume across the region is relatively light, with London's market closed for holiday. At last check, the French CAC 40 is up 1.8%, while Germany's DAX has added 1.4%.
Currencies and Commodities
The greenback is trading lower this morning, with the U.S. dollar index down about 0.1%. Meanwhile, crude oil futures have continued Friday's modest rise, with the front-month contract up 45 cents, or 0.5%, to trade near $85.82 per barrel. Elsewhere, gold futures have also extended their advance, with the malleable metal last seen about $20.10, or 1.1%, higher at $1,817.40 an ounce.
Unusual Put and Call Activity:
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