The Day Ahead: Keep Calm and Carry On

 | Feb 22, 2012 | 8:30 AM EST
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In the Headlines

U.S. stock futures were pointing slightly lower Wednesday. Traders -- and the media -- will be eyeing technical levels on major indices following Tuesday's intraday rise to the 13,000 on the DJIA.

In Europe, it's Hungary's turn in the spotlight, with the European Union (EU) saying it may withhold some funds if the nation cannot get a better grip on its spending. Greece is also a concern again, with many economists and analysts fretting that austerity measures may put too big a dent in growth prospects.

European indices were showing losses before Wall Street's open, with Germany's DAX suffering the most.

In Asia, stocks closed higher on Wednesday. Japanese exporters gained on yen weakness, while Chinese stocks advanced on reports that some real-estate buying restrictions may be lifted.

Economic Docket

U.S. economic reports due out today include January existing home sales from the National Association of Realtors. Economists expect turnover of 4.65 million units, up from December's level of 4.61 million. The numbers are due out at 10 a.m. EST.

Before Wednesday's open, the Mortgage Bankers Association said loan applications slumped 4.5% last week. The biggest drag came from the refinancing category, which skidded 4.8%.

Commodities Corner

West Texas Intermediate crude, which has been on the rise in recent sessions due to Iranian tensions, was down $0.39 per barrel early Wednesday. However, the price remained at high levels, at $105.86.

After making an upside leap on Tuesday, gold fell $1.70 per ounce to $1,756.80.

Earnings News

Today's earnings reports include Dollar Tree's (DLTR) fourth-quarter results, due out before the bell. The discount retailer earned $1.60 per share, topping views of $1.59. Sales came in at $1.95 billion, also ahead of expectations, which called for $1.93 billion. The stock has been rallying to all-time highs in recent sessions.

Also before today's opening bell, discount clothing and housewares retailer TJX (TJX) reports its fourth quarter. The operator of T.J. Maxx, Marshalls and HomeGoods stores is expected to report income of $0.62 per share on revenue of $6.72 billion. Here, too, shares have run up to fresh highs. As with many other stocks, volume has been somewhat muted on the uptrend.

Navigational gear maker Garmin (GRMN) beat fourth-quarter views, reporting earnings per share of $0.85 a share, well ahead of views of $0.66. Revenue also trounced expectations, coming in at $909.6 million, vs. views of $770 million. The shares bolted $4.74, 10.61%, to $49.43 in the premarket.

After Wednesday's close, DJIA component Hewlett-Packard (HPQ) is set to release its first-quarter results. Analysts are eyeing income of $0.87 per share on revenue of $30.71 billion. Results under still-new CEO Meg Whitman will be closely scrutinized. Earnings and sales growth rates slowed in the previous quarter.

Fellow PC maker Dell DELL was among big premarket decliners Wednesday. Shares plunged $1.34, 7.36%, to $16.87 following a disappointing sales forecast late Tuesday.

Market Movers

An early gainer was fertilizer maker Mosaic (MOS), rising $2.34, or 4.11%, to $59.25. The company settled a lawsuit regarding production at a Florida phosphate mine.

Analyst Actions

Analyst actions early Wednesday included a BMO Capital upgrade of Urban Outfitters (URBN) to Outperform from Market Perform. The analyst cited improved earnings visibility due to better merchandising and sustainable growth levels. The shares rose $0.51, or 1.79%, to $29 in the premarket.

Columnist Conversations

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we like this chart here, it appears ready to move higher. BOUGHT BZUN OCT 35 CALL AT 3.40
Large-cap, high-quality McKesson (MCK) is too cheap now, at $147.51 or so. The stock hit $243.60 more than 2.5...



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