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Opening View: DJIA Pointed South Ahead of Jobless, Manufacturing Data

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Stocks are set to open south of breakeven today, with Wall Street awaiting another batch of employment and manufacturing data. Specifically, the Labor Department's weekly jobless figures are slated for release at 8:30 a.m. Eastern, preceding tomorrow's highly anticipated nonfarm payrolls report for August. Furthermore, the Institute for Supply Management ( ISM ) manufacturing index is due out at 10 a.m. Eastern, with economists expecting a retreat beneath the benchmark 50 level. On the corporate front, a slew of same-store sales reports will roll in from the retail sector, which should give clues into the financial fallout from Hurricane Irene. After four straight days in the black, the Dow Jones Industrial Average (DJIA) is poised to start September -- which has been positive in four of the last five years -- roughly 21.5 points in the red.

In equities news, Costco Wholesale (COST - 78.54) made headlines last night, after the retailer announced that co-founder and CEO Jim Sinegal has decided to step down from the chief executive slot. The 75-year old will be replaced by President and COO Craig Jelinek, who will take the reins in January. In addition, COST said August same-store sales rose 11%, thanks to rising gasoline prices and a favorable forex backdrop. Analysts, on average, were expecting same-store sales to rise by just 9.3% last month.

In earnings news, Coldwater Creek (CWTR - 1.06) reported a fiscal second-quarter loss of $27.7 million, or 30 cents per share, compared to a profit of $1.5 million, or 2 cents per share, in the year-ago period. On an adjusted basis, CWTR lost 27 cents per share. Analysts, on average, had predicted a narrower loss of 22 cents per share. Revenue, meanwhile, plummeted 28% to $181.4 million, reflecting hits to both retail and direct sales. In addition, CWTR announced plans to close 35 to 45 stores over the next two years, which it expects to ease annualized expenses by $15 million to $20 million. "While we are disappointed with our second-quarter financial results, we had expected the period to be challenging as our summer assortment did not fully reflect our new merchandise direction," said Chairman and CEO Dennis Pence.

Elsewhere, Zumiez (ZUMZ - 18.49) banked a second-quarter profit of $2.6 million, or 8 cents per share, reversing its year-ago loss of $1.2 million, or 4 cents per share. By contrast, analysts were expecting earnings of just 5 cents per share. Meanwhile, net sales for the quarter climbed 14.9% to $112.2 million, boosted by a 7.5% increase in same-store sales. However, ZUMZ predicted earnings of 37 cents to 39 cents per share for the current quarter, falling short of Wall Street's forecast for a third-quarter profit of 44 cents per share.

Finally, Ciena Corp. (CIEN - 12.24) reported a second-quarter loss of $31.5 million, or 33 cents per share -- narrower than its year-earlier loss of $109.9 million, or $1.18 per share. Excluding items, the company said it swung to a profit of 8 cents per share, compared to an adjusted per-share loss of 9 cents a year earlier. Analysts, on average, predicted a loss of 8 cents a share for CIEN. Meanwhile, revenue rose 12% to $435.3 million, at the low end of the company's guidance for sales of $435 million to $455 million. Looking ahead, CIEN projected current-quarter revenue between $440 million and $460 million, falling short of the Street's consensus estimate for sales of $474 million.

Earnings Preview

Today's earnings docket will also feature reports from Finisar ( FNSR ), H&R Block ( HRB ), and Quiksilver ( ZQK ). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

As alluded to earlier, initial jobless claims are due out today, 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.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 923,055 call contracts traded on Wednesday, compared to 596,354 put contracts. The resultant single-session put/call ratio arrived at 0.65, while the 21-day moving average was 0.79.

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Overseas Trading

Asian stocks ended mostly higher today, with traders cheering a solid manufacturing report out of China. The country's purchasing managers index (PMI) jumped to 50.9 in August, marking the first monthly increase since March. On the heels of a stronger-than-forecast Chicago PMI reading, the data provided a bit of relief over the state of the global economic recovery. However, Shanghai's benchmark index still ended the session lower. "We must try our best to bring about a bigger drop in inflation in the second half of this year and lay a foundation for price controls for next year," said Premier Wen Jiabao in an interview, rekindling concerns about additional policy-tightening moves that could tamp down economic growth. By the close, Japan's Nikkei gained 1.2%, Hong Kong's Hang Seng edged up 0.3%, South Korea's Kospi added just fractions of a point, and China's Shanghai Composite shed 0.4%.

European markets have dipped into the red at midday, as regional manufacturing data was markedly less encouraging than comparable reports out of the U.S. and China. The final euro-zone PMI for August dropped to 49, marking the first breach of the benchmark 50 level since September 2009. Meanwhile, in equities news, L'Oreal was pummeled with negative analyst notes in the wake of its first-half results, while Lagardere was hit with a round of price-target cuts after warning of weaker-than-expected full-year earnings. At last check, the German DAX is down 1.5%, France's CAC 40 is off 0.8%, and London's FTSE 100 has shed 0.2%.

Currencies and Commodities

The greenback has gained ground this morning, with the U.S. dollar index up 0.4 point, or 0.6%, at last check. Elsewhere, crude oil futures have extended yesterday's eleventh-hour retreat, with the front-month contract trading 25 cents, or 0.3%, lower at $88.56 per barrel. Meanwhile, gold futures have given back yesterday's modest gains, with the malleable metal last seen about $8.70, or 0.5%, lower at $1,823 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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