U.S. stocks are clinging to breakeven this morning, as Wall Street exercises caution ahead of a closely watched, end-of-week meeting of European Union ( EU ) leaders. Ahead of the event, Treasury Secretary Timothy Geithner is making his rounds across the pond, and already offered his vote of confidence for the EU treaty drafted by German Chancellor Angela Merkel and French President Nicolas Sarkozy -- both of whom vowed to hold firm until a "powerful deal" is reached. In the meantime, investors will keep one eye on the latest consumer credit stats, slated to hit the Street today, as well as the European Central Bank (ECB), which is highly expected to lower interest rates at its own meeting tomorrow. Against this backdrop, buyers are walking on eggshells, with the Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) trading flat ahead of the bell.
In earnings news, Men's Wearhouse (MW - 27.19) reported third-quarter net earnings of $39.88 million, or 77 cents per share, up 58% from $25.26 million, or 47 cents per share, in the year-ago period. Excluding items, earnings came in at 79 cents per share, compared to 57 cents per share in the previous year. Meanwhile, revenue rose by 6.3% to $584.60 million, boosted by a 5.5% improvement in same-store sales. Analysts, on average, were expecting a profit of 65 cents per share on revenue of $570.94 million. Looking ahead, MW is expecting an adjusted fourth-quarter loss of 12 cents to 15 cents per share, falling short of the consensus estimate for a loss of 11 cents per share. However, the retailer's forecast for a full-year profit of $2.28 to $2.31 per share marked an improvement over its previous guidance of $2.13 to $2.20 per share.
Casey's General Stores (CASY - 52.72) unveiled fiscal second-quarter earnings of $37.6 million, or 99 cents per share, up 73% from $21.7 million, or 51 cents per share, in the year-ago quarter. Meanwhile, revenue increased 32% to $1.78 billion, even as gross margin contracted to 14.7% from 16.8%. While CASY's bottom-line results exceeded analysts' expectations for 98 cents per share, its revenue failed to meet the Street's view of $1.84 billion.
Finally, Vera Bradley, Inc. (VRA - 37.16) reported a fiscal third-quarter profit of $13 million, or 32 cents per share, compared to last year's profit of $6 million, or 17 cents per share. Excluding items, earnings arrived at 22 cents per share. Revenue was on the rise, jumping 32% to $121.1 million. The results came in mixed, as analysts, on average, were expecting earnings of 28 cents per share on sales of $110 million. Looking forward, VRA is predicting relatively tepid fourth-quarter earnings of 44 cents to 47 cents per share on sales of $125 million to $130 million. By comparison, analysts are calling for a profit of 47 cents per share on revenue of $131 million.
Today's earnings docket will also feature reports from Vail Resorts ( MTN ), G-III Apparel ( GIII ), Greif ( GEF ), and Pacific Sunwear ( PSUN ). Keep your browser at SchaeffersResearch.com for more news as it breaks.
Today brings us the usual crude inventories stats, along with the Federal Reserve's monthly consumer credit report. On Thursday, the regularly scheduled report on first-time jobless claims will hit the Street, as well as the government's wholesale inventories data. Finally, Friday rounds out the week with Uncle Sam's monthly trade balance report and the Thomson Reuters/University of Michigan consumer sentiment index.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 696,852 call contracts traded on Tuesday, compared to 527,251 put contracts. The resultant single-session put/call ratio arrived at 0.76, while the 21-day moving average was 0.71.
The major Asian indexes ended in positive territory today, with hopes running high ahead of this week's EU summit. Reports indicate that officials may opt to ramp up the size of the euro zone's bailout fund , which helped to offset Standard & Poor's threat to downgrade the credit rating of the European Financial Stability Facility (EFSF). By the close, Japan's Nikkei rose 1.7%, Hong Kong's Hang Seng gained 1.6%, South Korea's Kospi added 0.9%, and China's Shanghai Composite tacked on 0.3%.
On the other hand, stocks in Europe are edging lower at midday, with equities giving back earlier gains after a senior German official threw cold water on investors' pre-summit optimism. Speaking anonymously, the source told Reuters that he was "more pessimistic than last week about reaching an overall deal" with other EU leaders. At last look, London's FTSE 100 is down 0.1%, the German DAX is off 0.1%, and the French CAC 40 is up 0.2%.
Currencies and Commodities
The greenback is on the rebound this morning, with the U.S. dollar index up 0.2%. Crude oil, meanwhile, has continued yesterday's descent, with the front-month contract last seen about 0.2% lower at $101.07 per barrel. Finally, gold futures have also extended their recent slide, surrendering 0.2% to trade near $1,728.10 an ounce.
Unusual Put and Call Activity:
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