Opening View: DJIA Ready to Rebound; Yahoo Tells Bartz to Hit the Bricks

Shutterstock photo

After suffering three straight triple-digit drops, the Dow Jones Industrial Average (DJIA) is flirting with a triple-digit gain ahead of the bell today. Bolstering sentiment is buzz surrounding President Obama's speech to Congress tomorrow night, where he could unveil a $300 billion plan to boost jobs, according to Bloomberg. In addition, Wall Street is taking its cues from overseas, where traders are celebrating solid economic data out of Australia, a German court ruling, and the termination of Yahoo ( YHOO ) CEO Carol Bartz. In pre-market trading, the DJIA is lingering about 104 points north of fair value, while the S&P 500 Index (SPX) is set for a 12.5-point lead.

As alluded to earlier, Yahoo (YHOO - 12.91) CEO Carol Bartz was fired last night, ending her tenure which began in January 2009. According to Reuters, Bartz sent an email notifying employees that she was "fired over the phone" by Chairman Roy Bostock. Until YHOO finds a permanent replacement, CFO Tim Morse will step into the role as interim CEO. Ahead of the bell, the shares of YHOO are headed about 6% higher.

In earnings news, VeriFone Systems (PAY - 35.07) said fiscal third-quarter earnings soared 42% to $26.3 million, or 28 cents per share, from $18.5 million, or 21 cents per share, a year earlier. Excluding items, the company said it earned 49 cents per share, compared to last year's adjusted per-share profit of 36 cents. Revenue, meanwhile, jumped 21% to $317 million. Analysts, on average, were anticipating a slimmer third-quarter profit of 46 cents per share on $299.4 million in sales. Looking ahead, PAY expects fourth-quarter earnings of 49 cents to 50 cents per share on revenue of $395 million to $400 million. For comparison, Wall Street was calling for a fourth-quarter profit of 49 cents per share on revenue of $396 million. In pre-market trading, PAY is up about 3.9%.

Pep Boys (PBY - 9.48) reported a second-quarter profit of $13.9 million, or 26 cents per share, up 32% from last year's earnings of $10.6 million, or 20 cents per share. Revenue for the quarter climbed 3.5% to $522.6 million. The results were mixed, with analysts looking for a profit of 19 cents per share on $527 million in revenue. "Our profitability continues to improve as we weather the challenging macroeconomic environment of high gas prices and depressed consumer confidence," said President and CEO Mike Odell. "Our maintenance and repair services remain stable, allowing us to mostly offset soft tire sales."

Earnings Preview

Today's earnings docket will also feature reports from AeroVironment ( AVAV ), Hovnanian Enterprises ( HOV ), Men's Wearhouse ( MW ), Smith & Wesson ( SWHC ), Sycamore Networks (SCMR), and Talbots (TLB). Keep your browser at for more news as it breaks.

Economic Calendar

The Fed's Beige Book report for September will hit the Street today. Thursday features the usual weekly report on jobless claims, as well as July's trade balance. Crude inventories are also due out one day later than usual, thanks to Monday's holiday. On Friday, 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 849,554 call contracts traded on Tuesday, compared to 647,928 put contracts. The resultant single-session put/call ratio arrived at 0.76, while the 21-day moving average was 0.77.

The summer 2011 issue of SENTIMENT magazine is now available here.

Overseas Trading

Stocks in Asia ended solidly higher today, bouncing back from steep losses in recent sessions. An upbeat GDP report from Australia helped set the bullish mood, with the country's economy expanding by a stronger-than-forecast 1.2% during the second quarter. In the tech sector, shares of Yahoo Japan and rallied on news of CEO Carol Bartz's termination. Meanwhile, a tamer yen lifted Japanese exporters. By the close, South Korea's Kospi jumped 3.8%, Japan's Nikkei rose 2%, China's Shanghai Composite tacked on 1.8%, and Hong Kong's Hang Seng gained 1.7%.

European markets are also pointed higher at midday, with traders pricing in some relief over a German court decision. The country's Constitutional Court struck down a number of lawsuits intended to block Germany's involvement in euro-zone bailouts, clearing the path for cash-strapped countries like Italy and Greece to receive aid. At last check, the German DAX has added 2.8%, the French CAC 40 is up 2.6%, and London's FTSE 100 is 1.7% higher.

Currencies and Commodities

After strengthening against its foreign rivals on Tuesday, the greenback has pared its gains this morning, with the U.S. dollar index down about 0.5%. Elsewhere, crude oil futures have bounced back from their recent downturn, with the front-month contract last seen 69 cents, or 0.8%, higher at $86.71 per barrel. Meanwhile, after tagging a new intraday acme of $1,923.70 an ounce yesterday, gold futures have continued their late-session slide, with the malleable metal down $36.70, or almost 2%, to flirt with $1,836.60 an ounce.

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics



Schaeffer's Investment Research, Inc. has been providing stock market publications, market recommendation services and stock option education since its inception in 1981 by founder and CEO, Bernie Schaeffer.

Learn More