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Opening View: DJIA Pointed Lower After Obama Speech; TXN, DNDN in Focus

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Just as Fed Chairman Ben Bernanke's relatively tame speech hit Wall Street with a thud yesterday, President Obama's address to Congress last night has done little to inspire the bulls. To the surprise of no one, the commander-in-chief unveiled The American Jobs Act -- though the estimated price tag of the stimulus plan was much higher than expected, at roughly $447 billion. However, despite calling the economic stagnation a "national crisis" and all but begging a divided Capitol Hill to pass the bill "right away," doubts remain as to whether lawmakers will come together in a timely fashion. Elsewhere on the Street, a downwardly revised earnings forecast from tech titan Texas Instruments ( TXN ), as well as anxiety ahead of a Group of Seven (G-7) summit, are also weighing on sentiment, with all three major market indexes set to follow their global comrades lower at the bell.

In equities news, Dendreon Corp. (DNDN - 10.88) last night announced plans to lay off 500 employees, or about 25% of its workforce, in order to partially negate weaker-than-expected sales of Provenge. The total cost of the restructuring is expected to be about $21 million, with manufacturing workers expected to be the hardest hit. Separately, DNDN announced the departure of COO Hans Bishop; named John Osborn executive vice president, general counsel, and secretary; and appointed Savient Pharmaceuticals ( SVNT ) CEO John Johnson to its board of directors. At last check, the shares of DNDN are headed about 1.5% lower.

In earnings news, Texas Instruments (TXN - 25.80) lowered the top end of its third-quarter financial guidance, citing "broadly lower demand across a wide range of products, markets and customers." The company now anticipates quarterly earnings of 56 cents to 60 cents per share, down from its initial forecast of 55 cents to 65 cents per share. Revenue is now expected to range between $3.23 billion and $3.37 billion, compared to TXN's previous guidance of $3.40 billion to $3.70 billion. Analysts, on average, are expecting TXN to bank a third-quarter profit of 59 cents per share on revenue of $3.51 billion.

Ulta Salon, Cosmetics & Fragrance (ULTA - 59.76) reported second-quarter earnings of $23.9 million, or 38 cents per share, up 83% from $13.1 million, or 22 cents per share, in the year-ago quarter. Meanwhile, revenue rose 22.6% to $394.6 million, thanks to a healthy 11.3% increase in same-store sales. The results surpassed analysts' consensus estimates for a per-share profit of 32 cents on sales of $384.1 million. For the third quarter, ULTA expects to earn 36 cents to 38 cents per share on revenue of $400 million to $407 million. Analysts, on average, were calling for earnings of 34 cents per share on revenue of $395.5 million. In pre-market trading, ULTA is poised to rally roughly 2.8%.

Earnings Preview

Today's earnings docket will also feature reports from Kroger ( KR ), Lululemon Athletica ( LULU ), and Piedmont Natural Gas ( PNY ). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Wholesale inventories for July will round out the week's economic calendar.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 798,570 call contracts traded on Thursday, compared to 577,831 put contracts. The resultant single-session put/call ratio arrived at 0.72, while the 21-day moving average was 0.74.

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Overseas Trading

Stocks in Asia ended lower today, pressured in part by a downbeat reading on Japan's gross domestic product (GDP). The quake-stricken country's second-quarter GDP was downwardly revised to show a 0.5% decline, compared to the initial estimate of a 0.3% contraction. Meanwhile, chip stocks backpedaled after Texas Instruments offered a downwardly revised earnings forecast late Thursday. However, Chinese inflation data was relatively well-received, with consumer prices cooling off to 6.2% in August from July's multi-year peak of 6.5%. By the close, South Korea's Kospi slid 1.8%, Japan's Nikkei fell 0.6%, Hong Kong's Hang Seng lost 0.2%, and China's Shanghai Composite gave up 0.05%.

Banking stocks are leading the decline in Europe, where traders are pricing in renewed concerns over the state of the U.S. economy. With no clear signals on future stimulus efforts from Fed boss Bernanke, and with President Obama facing an uphill battle to pass his ambitious jobs plan, investors overseas seem less than confident that the powerhouse economy can stay on the right course. Anxiety is also running high ahead of a meeting of G-7 finance ministers and central bankers in Marseilles, France, where leaders are expected to discuss ongoing global debt concerns. At midday, the French CAC 40 is down 1.4%, the German DAX is down 0.9%, and London's FTSE 100 is off 0.7%.

Currencies and Commodities

The greenback has gained some ground this morning, with the U.S. dollar index up 0.5% at last look. Elsewhere, crude oil futures have extended yesterday's late-session slide, with the front-month contract down $1.25, or 1.4%, at $87.80 per barrel. Finally, after soaring amid a widespread flight to safety on Thursday, gold futures have pared some of their gains. At last check, the malleable metal has backpedaled $16.30, or 0.9%, to trade near $1,841.20 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.

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