The Day Ahead: European Woes Remain a Drag

 | Feb 06, 2012 | 8:30 AM EST
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In the Headlines

Wall Street futures pointed to a moderately lower open Monday, following Friday's finish that put the major indices into multi-year high territories.

Decliners outpaced advancers in Europe, with traders fretting about today's deadline for Greece to accept the European Union's bailout deal. Financials were some of the region's biggest losers Monday.

Among the major global indices, France's CAC 40 was suffering the most, as the nation's banks showed steep declines.

The euro was trading lower against the dollar ahead of Monday's open on Wall Street.

Elsewhere, gains in Asian markets were partly due to Friday's strong jobs data, as well as optimism about growth in other global markets. Hong Kong stocks were not swept up in the regional optimism, with the Hang Seng closing 0.23% lower.

Commodities Corner

West Texas Intermediate crude fell by $0.86 per barrel, to $96.98 in early Nymex trading.

Industrial metal copper, which has been on the rise in recent weeks, fell 0.0395 Monday morning, to $3.86 per pound.     

Gold, meanwhile, slumped by $17.30 per ounce to $1,723 in early Comex trading.

Earnings News

Managed-care provider Humana (HUM) said first-quarter earnings were in line with views, at $1.20 a share. Revenue was $9.06 billion, below expectations for $9.24 billion. The company guided full-year earnings in a range below Wall Street's views. The shares shed $0.51, or 0.57%, to $89.61 in the premarket.

Toymaker Hasbro (HAS) beat fourth-quarter earnings views by a penny, reporting income of $1.06 per share. Revenue was a bit on the light side, coming in at $1.33 billion, vs. expectations of $1.34 billion. That marked a year-over-year gain, however. The company cited strength in overseas sales, as well as in the preschool and boys' categories. Hasbro shares skidded $1.97, or 5.49%, to $33.89 following the announcement.

Also due out before the open is wholesale food distributor Sysco (SYY), expected to report income of $0.44 a share on sales of $10.04 billion. Shares have been attempting to climb out of a nine-month price consolidation.

After the bell, Yum! Brands (YUM), operator of the Pizza Hut, KFC and Taco Bell chains, reports its fourth quarter. Analysts have pegged earnings at $0.74 per share on revenue of $4.03 billion. Yum! shares rallied to all-time highs last week.

Early Movers

Early movers Monday included Boeing (BA) falling $0.90, 1.18%, to $75.44. The company said it would fix fuselage problems on its 787 Dreamliner, emphasizing that the repairs would not affect production of the already-delayed plane. 

Amazon (AMZN) fell $1.66, or 0.88%, to $186.02 in the premarket. The online retailer is rumored to be launching a brick-and-mortar experiment in the form of a Seattle store to sell e-readers, tablets and related accessories.

Analyst Actions

After its pug-racing Super Bowl commercial -- featuring Mark Cuban -- Sterne Agee upgraded shoemaker Skechers (SKX) to Neutral from Underperform. The analyst cited strength in new product launches in the second half of the year. Skechers shares ran $0.10 higher, or 0.76%, to $13.18 in early trade.

Sterne Agee also upgraded another shoemaker, K-Swiss (KSWS), to Neutral from Underperform, citing valuation. Following months of selling pressure, the shares have traded higher in the past seven weeks.

Columnist Conversations

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