Futures are pointed lower this morning, as traders grow weary ahead of tomorrow's highly anticipated speech by Federal Reserve Chairman Ben Bernanke. As the week has progressed, hopes of additional stimulus measures by the Fed seem to have evaporated, and the Street has had to digest several not-so-pleasant pieces of economic data along the way. Of bigger concern to the Street today, though, is news that Apple Inc.'s (AAPL - 376.18) CEO Steve Jobs has resigned. The resignation has sent shockwaves through the Street, as investors assess the future of AAPL sans Jobs, who helped make the tech firm the second-most valuable corporation in the world.
First things first, last night, AAPL's Steve Jobs announced that he would be resigning from his role as CEO. This isn't exactly surprising, though, as health problems over the years have caused Jobs to take several medical leaves from his position. "I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple's CEO, I would be the first to let you know. Unfortunately, that day has come," wrote Jobs in his resignation letter. Apple's board has appointed Tim Cook to replace the iconic CEO. Jobs will remain on board as the chairman of the board of directors -- a position created just for him. Analysts have already started to weigh in, with J. P. Morgan reiterating its "overweight" opinion of the shares, as Jobs' exit could create an "attractive entry point" for the stock. Meanwhile, the Street seems to be adjusting to this news, with shares down nearly 4% in pre-market trading.
Meanwhile, in earnings news, Big Lots (BIG - 32.38) said its fiscal second-quarter net profit was $35.7 million, or 50 cents per share, compared to $38.9 million, or 48 cents per share, in the year-ago period. Revenue for the quarter jumped 2.2% to $1.17 billion. These results came in higher than analysts' prediction for earnings of 44 cents per share on $1.16 billion in revenue. Looking ahead, BIG revised its fiscal 2011 earnings per share forecast to $2.80 to $2.90, from $2.75 to $2.90 previously. Analysts had forecast full-year earnings of $2.89. "This updated guidance reflects our outperformance during the second quarter and the forecasted positive impact of recent share repurchase activity, partially offset by the expected impact of our recently acquired Canadian business," BIG said in a statement.
Guess Inc. (GES - 33.29) reported second-quarter earnings of $60.7 million, or 65 cents per share - down 9.1% from the year-ago quarter. Excluding items, the retailer said it earned 84 cents per share, matching analysts' expectations. Meanwhile, revenue rose 17% to $677.2 million, topping the Street's forecast for sales of $656.4 million. However, GES projected current-quarter earnings of 71 cents to 74 cents per share on revenue of $650 million to $665 million, falling woefully short of analysts' predictions for a per-share profit of 84 cents on sales of $688 million. Furthermore, the company cut its full-year adjusted earnings target to a range of $3.25 to $3.35 per share, and narrowed its revenue target to a range of $2.74 billion to $2.78 billion. Previously, GES had forecast full-year earnings of $3.30 to $3.50 per share on sales of $2.74 billion to $2.8 billion.
Applied Materials (AMAT -11.36) reported a fiscal third-quarter profit of $476 million, or 36 cents per share, nearly quadrupling its year-ago earnings of $123 million, or 9 cents per share. Excluding items, AMAT earned 35 cents per share, while sales rose 11% to $2.79 billion. However, AMAT predicted that fourth-quarter earnings would range between 16 cents and 24 cents per share, excluding items, based on a 15% to 30% sequential drop in revenue. The forecast fell short of analysts' expectations, which called for a profit of 30 cents per share for the current quarter. "While the fundamental drivers of our markets remain strong, we are seeing softness in our business resulting from the uncertain economic environment and overcapacity in solar," said Chairman and CEO Mike Splinter.
Today's earnings docket will feature reports from Aruba Networks ( ARUN ), Cyberonics ( CYBX ), Hormel Foods ( HRL ), Pandora Media ( P ), and Sanderson Farms ( SAFM ). Keep your browser at SchaeffersResearch.com for more news as it breaks.
Today brings our usual weekly report on initial and continuing jobless claims. The economic calendar ends with a bang on Friday, with all eyes turning to Jackson Hole and Fed Chairman Ben Bernanke's highly anticipated speech on "Near- and Long-Term Prospects for the U.S. Economy." Also slated to hit the Street are the Commerce Department's revised estimate of second-quarter gross domestic product (GDP), and the final Thomson Reuters/University of Michigan consumer sentiment index for August.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 889,331 call contracts traded on Wednesday, compared to 596,897 put contracts. The resultant single-session put/call ratio arrived at 0.67, while the 21-day moving average was 0.80.
Stocks in Asia ended mostly higher today, keeping pace with gains on Wall Street. However, there was some patchy weakness in the tech sector on news that AAPL CEO Steve Jobs has resigned. A number of companies with ties to the iPhone parent slipped, with Foxconn and Hon Hai Precision Industry tumbling in Taiwan. On the other hand, Samsung rallied in Korea after a Dutch patent court dismissed most of Apple's patent infringement claims against its Galaxy smartphones. By the close, China's Shanghai Composite gained 2.9%, Japan's Nikkei and the Hong Kong Hang Seng each rose 1.5%, and South Korea's Kospi added 0.6%.
European markets are wobbling around breakeven at midday, despite well-received earnings from French bank Credit Agricole and U.K.-listed commodity giant Glencore. Early gains have faded heading into the second half of the session, with a bit of anxiety setting in ahead of tomorrow's speech from Bernanke. At last look, the German DAX is up 0.6%, the French CAC 40 is 0.8% higher, and London's FTSE 100 is off 0.1%.
Currencies and Commodities
Gold has continued to pull back from record highs this morning, as investors continue their round of profit-taking. Last night, COMEX upped its margin requirement by 27% in order to "ensure adequate collateral coverage," marking the second such move in as many weeks. Amid this backdrop, gold futures are down nearly 44 points, or 2.5%. Meanwhile, the U.S. dollar is trading fractionally lower this morning, as anxieties mount ahead of tomorrow's speech by the Fed. Ahead of the open, the U.S. dollar index is down 0.06 point, or 0.1%. Finally, crude has rebounded slightly from Wednesday's sell-off, with the October-dated contract up 0.5 point, or 0.6%.
Unusual Put and Call Activity:
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.