Wall Street appears to be headed for a relatively flat open this morning, as U.S. stock futures on the Dow Jones Industrial Average (DJIA) are up 19 points at 10,417, or about eight points above fair value. After pushing the Dow and the S&P 500 Index (SPX) to their best closes since October of last year, traders are once again taking it easy. All of that could change later this morning, however, as key reports on housing starts, consumer inflation, and weekly U.S. petroleum supplies are scheduled for release. Investors should also keep an eye on salesforce.com inc. (CRM), BJ's Wholesale Club Inc. (BJ), and Autodesk Inc. (ADSK), as all three have released their quarterly earnings statements.
The U.S. Dollar Index is once again headed lower in pre-market activity, falling 0.43% to 71.96 at last check. As a result, the December gold futures contract is up $8.40 at $1,147.70 an ounce, while crude oil for January delivery is up 94 cents at $80.66 per barrel in electronic trading.
Merger activity has once again risen to the forefront, as Hershey Co. (HSY) and Italian chocolate maker Ferrero Spa each said they're considering making a bid for Cadbury (CBY). Currently, Cadbury is attempting to fend off a hostile takeover attempt by Kraft Foods (KFT).
In earnings news, salesforce.com inc. (CRM) said that its third-quarter net income rose to $20.7 million, or 16 cents per share, from $10.1 million, or 8 cents per share, in the same period last year. Revenue rose 20% to $331 million. Analysts were expecting a profit of 16 cents per share on $324 million in revenue.
Elsewhere, BJ's Wholesale Club Inc. (BJ) said that its third-quarter profit fell to $17.7 million, or 32 cents per share, from $28.2 million, or 48 cents per share, a year earlier. Sales rose 2% to $2.45 billion from $2.4 billion. Comparable club sales fell 2.5% and would have risen 3.9% minus the impact of gasoline sales. Excluding 13 cents per share related to a legal claim settlement, BJ's would have earned 45 cents per share, matching Wall Street's expectations.
Finally, Autodesk Inc. (ADSK) reported a third-quarter income of $29.5 million, or 13 cents per share, compared with a profit of $104.5 million, or 45 cents per share, for the year-earlier period. Revenue was $416.9 million, down from $607.1 million. Adjusted income was 27 cents a share. Analysts had expected earnings of 22 cents per share on revenue of $415.2 million.
Earnings Preview
The earnings calendar offers up reports from Chico's FAS Inc. (CHS), China Sunergy Co. Ltd. (CSUN), Solarfun Power Holdings Co. Ltd. (SOLF), Hot Topic Inc. (HOTT), Limited Brands Inc. (LTD), NetApp Inc. (NTAP), and PetSmart Inc. (PETM) today. Keep your browser at SchaeffersResearch.com throughout the day for more.
Economic Calendar
The economic calendar brings October's housing starts, building permits, the consumer price index (CPI), the core CPI, and weekly U.S. petroleum supplies. On Thursday, initial jobless claims will be joined by October's leading economic indicators and November's Philadelphia Fed manufacturing index. There are no reports slated for release on Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,445,455 call contracts traded on Tuesday, compared to 938,787 put contracts. The resultant single-session put/call ratio arrived at 0.65, while the 21-day moving average rose to 0.63.
**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**
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.
Overseas Trading
Overseas trading is mixed this morning, as only seven of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.39%. In Asia, the various markets closed mixed, with banking shares leading Japan lower on concerns over equity issuance. Tokyo Tatemono dropped 17% after stating that it will raise up to 45.64 billion yen through a new share issue. Mitsubishi UFJ Financial Group slipped 0.6% before announcing plans to issue billions of dollars of new shares to bolster its capital base. MUFG also reported that group net income for the fiscal half ended in September soared more than 50%, thanks to gains in trading. In Hong Kong, the Hang Seng Index failed to stay above the psychologically important level of 23,000 for a second session on caution after recent gains. A 2.5% rise in index heavyweight China Mobile's shares supported the market, however, after Chairman Wang Jianzhou said the company is still in talks with Apple to sell the iPhone in China.
Turning to Europe, shares rose for the fifth time in six sessions. Autos were higher, with Daimler shares up 1.2% and Peugeot shares up 1%. Metal and mining firms were also strong. Anglo American shares rose 1.2% and Kazakhmys shares rose 1.2%. Banks were also in the news, with Allied Irish Banks shares up 1.7% in Dublin after it said that it's expecting to generate an underlying operating profit of around 2 billion euros in 2009 before the impact of bad debt provisions. Shares of Air Berlin climbed 5.4% after the airline said late Tuesday that its third-quarter net profit more than doubled to 95.2 million euros from 45.1 million euros a year earlier. The company confirmed its outlook that its 2009 operating profit will be better than in 2008.
The U.S. Dollar Index (DX/Y) gained 0.62% to trade at 75.30 on Tuesday. The greenback benefited from a flight to safety, as traders looked for cover in the wake of economic data that pointed toward fragility in the current economic rebound. Specifically, while the National Association of Home Builders' sentiment index held steady at 17 in November, October's index was revised lower to 17 from the 18 previously reported. Meanwhile, industrial output rose less than expected by in October, while the Treasury Department reported that net foreign purchases of long-term U.S. securities increased to $40.7 billion in September from $34.2 billion in August. Against this backdrop, the euro slipped to $1.4869, while the dollar advanced to 89.32 yen.
The futures contract on the 30-year bond (US/1 – 121'02) rose 7/32 on Tuesday. Treasurys turned higher on the session, pushing short-term yields down to a new 10-month low, as economic reports showed weakness in homebuilder confidence, lower inflation, and moderating factory output. The data supported expectations that the Federal Reserve would keep interest rates low for the time being.
Commodity Corner
Despite a strengthening dollar, crude futures settled higher on Tuesday, as commodities traders anticipated a decline in domestic supplies. Economists are expecting today's oil inventories report from the Energy Information Administration's (EIA) to show a decline of 600,000 barrels in the latest week. In addition, the Street is expecting a 500,000-barrel dip in distillate inventories, including heating oil and diesel. Against this backdrop, January-dated crude oil finished with a gain of 19 cents, or 0.24%, at $79.72 per barrel.
Elsewhere in the commodities pits, gold futures also defied the dollar's rebound from 15-month lows, ending at a record high on the heels of a hefty sale by the International Monetary Fund (IMF). More specifically, the IMF said it unloaded two metric tons of gold to the central bank of Mauritius, which helped the yellow metal pare an early deficit. By the close, gold for December delivery added 20 cents to settle at $1,139.40 an ounce.
Unusual Put and Call Activity:
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