U.S. stocks started the week on a high note, as Wall Street celebrated the end of Col. Muammar Gaddafi's reign in Libya. By the close, all three major indexes were sitting on small, but respectable, gains. However, the big story in the U.S. this week is Federal Reserve Chairman Ben Bernanke's speech, which is set to happen in Jackson Hole, Wyo., on Friday. Traders are hopeful that the tight-lipped chairman will hint at further quantitative easing for the still-struggling economy. Meanwhile, upbeat economic data from China and Europe have given the bulls something tangible to celebrate this Tuesday morning, putting all three major indexes in position to start the session in the black.
Williams-Sonoma, Inc. (WSM - 30.03) said second-quarter income rose 28% to $39.3 million, or 37 cents per share, from $30.8 million, or 28 cents per share, a year ago. Excluding items, WSM earned 37 cents per share, while revenue rose to $814.8 million. Analysts had expected WSM to report a profit of 36 cents per share on $822.8 million of revenue. Looking ahead, the home furnishings firm increased its full-year earnings forecast to a range between $2.17 and $2.22 per share, in line with analysts' forecast for fiscal 2012 earnings of $2.22 per share. Ahead of the open, WSM is up 3.3%.
Growing commodities costs have hurt H.J. Heinz Company (HNZ - 52.04), which reported its first-quarter results this morning. Breaking down the numbers, HNZ said its first-quarter profit fell to $226.1 million, or 70 cents per share, from $240.4 million, or 76 cents per share, in the year-ago period. Excluding special items, Heinz said it earned 78 cents per share, falling short of the consensus estimate for 83 cents per share. Meanwhile, revenue increased to $2.85 billion from $2.48 billion. Finally, Heinz affirmed its fiscal-year outlook of $3.24 to $3.32 a share, which is a far cry from the consensus estimate for full-year earnings of $3.65 per share.
Today's earnings docket will feature reports from Daktronics ( DAKT ), Medtronic ( MDT ), Melco Crown Entertainment ( MPEL ), and Trina Solar ( TSL ). Keep your browser at SchaeffersResearch.com for more news as it breaks.
Today's economic calendar features new home sales for July, along with the Richmond Fed's manufacturing index for August. Durable goods orders for July are due out on Wednesday, as well as the regularly scheduled update on petroleum stockpiles. Thursday 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 1,029,436 call contracts traded on Monday, compared to 755,987 put contracts. The resultant single-session put/call ratio arrived at 0.73, while the 21-day moving average was 0.79.
Asian markets ended higher today, with traders expressing relief over the latest Chinese economic data. The HSBC China Flash purchasing managers index (PMI) arrived at 49.8 in August, edging up from July's reading of 49.3. The report still points to contraction in the country's factory activity, though China's economy so far seems to be avoiding the "crash landing" that many feared would result from the government's policy-tightening efforts. Elsewhere, Kia Motors helped lead a rebound in Seoul, after the automaker unveiled a stock buyback worth 163.3 billion won. By the close, South Korea's Kospi rallied 3.9%, Hong Kong's Hang Seng added 2%, China's Shanghai Composite climbed 1.5%, and Japan's Nikkei tacked on 1.2%.
Upbeat manufacturing data also brought out the bulls in Europe, after Germany's flash PMI for August weighed in at 52 -- comfortably topping consensus estimates, and pointing to continued expansion in the factory sector. With sentiment already lifted by China's well-received data, traders have taken this as an opportunity to scoop up beaten-down stocks. At last check, the French CAC 40 is up 1.9%, the German DAX is 1.7% higher, and London's FTSE 100 has climbed 1.2%.
Currencies and Commodities
The dollar has lost ground against its rivals this morning, with the euro getting a lift after Germany's PMI reading showed manufacturing activity didn't slow as expected this month. Ahead of the open, the U.S. dollar index is down 0.4 point, or 0.5%. Meanwhile, the end of Col. Muammar Gaddafi's regime in Libya has provided a boost for black gold, with crude futures up 1.1 points, or 1.3%, this morning. Elsewhere, gold has pulled back from its record highs, as traders take profits ahead of Bernanke's highly anticipated speech this Friday. Against this backdrop, gold futures have surrendered 7.4 points, or 0.4%.
Unusual Put and Call Activity:
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