The bulls are once again in control this morning, as Wall Street celebrates signs of progress across the pond. After pulling an all-nighter in Brussels, the majority of European Union ( EU ) leaders agreed on tighter fiscal rules for the euro zone. However, a handful of the 27 nations -- including Britain -- failed to agree on treaty changes drafted by German Chancellor Angela Merkel and French President Nicolas Sarkozy . Nevertheless, while European Central Bank (ECB) President Mario Draghi applauded the tentative deal, hopes for a unanimous adoption of the treaty appear slim. "We're not in the euro and I'm glad we're not in the euro," said British Prime Minister David Cameron. "We're never going to join the euro and we're never going to give up this kind of sovereignty that these countries are having to give up." Nevertheless, investors seem hopeful ahead of another round of talks today, with the Dow Jones Industrial Average (DJIA) poised for a triple-digit jump out of the gate.
In earnings news, Texas Instruments (TXN - 29.92) cut its fourth-quarter earnings guidance to 21 cents to 25 cents per share on revenue of $3.19 billion to $3.33 billion. Previously, the firm forecast per-share earnings of 28 cents to 36 cents on sales of $3.26 billion to $3.54 billion. Analysts, on average, are calling for current-quarter earnings of 48 cents per share on revenue of $3.41 billion. The chipmaker attributed the downwardly revised guidance to weaker demand. In pre-market trading, TXN is headed 6% lower.
Analogic Corporation (ALOG - 54.91) reported a fiscal first-quarter profit of $4 million, or 32 cents per share, compared to its year-ago profit of $2.6 million, or 20 cents per share. Earnings on a non-GAAP basis arrived at 53 cents per share. Net sales also improved, increasing 14% to $117.9 million. The results came in much better than expected, with analysts calling for an adjusted profit of 43 cents per share on $113.4 million in revenue. Following the strong earnings report, ALOG announced a cash dividend of 10 cents per share, and said its board authorized the repurchase of up to $30 million in common stock.
Finally, Smith & Wesson (SWHC - 3.33) reported fiscal second-quarter net income of $948,000, or 1 cent per share, down from $2.6 million, or 4 cents per share, in the year-ago period. Meanwhile, revenue rose 10.5% to $92.3 million. Analysts, on average, were expecting a loss of 4 cents per share on revenue of $96.8 million. Looking ahead, SWHC is forecasting fiscal third-quarter revenue between $92 million and $96 million, and upped its outlook for fiscal 2012 sales to a range of $385 million and $395 million.
Earnings Preview
Today's earnings docket will also feature reports from Titan Machinery ( TITN ) and KMG Chemicals ( KMGB ). Keep your browser at SchaeffersResearch.com for more news as it breaks.
Economic Calendar
We'll round out the week with Uncle Sam's monthly trade balance report and the Thomson Reuters/University of Michigan consumer sentiment index.
Market Statistics
Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 794,559 call contracts traded on Thursday, compared to 619,105 put contracts. The resultant single-session put/call ratio arrived at 0.78, while the 21-day moving average was 0.72.
Overseas Trading
Stocks in Asia ended with a thump today, despite data showing a significant decline in Chinese inflation during the month of November. That pleasant surprise was offset by a report pointing to slower-than-forecast industrial production growth on the mainland, suggesting that the outlook is still murky for the emerging economy. Meanwhile, traders also priced in some disappointment over a lack of European unity, as leaders failed to reach an agreement regarding a revamped EU treaty. By the close, Hong Kong's Hang Seng shed 2.7%, South Korea's Kospi lost 2%, Japan's Nikkei fell 1.5%, and China's Shanghai Composite gave up 0.6%.
Meanwhile, European markets are pointed higher at midday, despite a choppy start to the session. At a summit in Brussels, British Prime Minister Cameron dug in his heels, and refused to agree to proposed EU treaty reforms. However, most other member countries agreed to enforce new fiscal rules via an inter-governmental treaty, which has propped up investor sentiment. Additionally, another 200 billion euros will be deployed to the International Monetary Fund ( IMF ) to provide needed aid and liquidity to struggling nations. At last check, the French CAC 40 is up 1.9%, the German DAX has gained 1.2%, and London's FTSE 100 is 0.3% higher.
Currencies and Commodities
The greenback has pulled back this morning, with the U.S. dollar index down 0.4%. Crude oil, meanwhile, is on the rebound, with the front-month contract last seen 0.5% higher to trade near $98.82 per barrel. Finally, gold futures have bounced back from yesterday's drubbing, tacking on 0.7% to trade near $1,724.70 an ounce.
Unusual Put and Call Activity:
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
