The Day Ahead: Subdued Start

 | Mar 02, 2012 | 8:30 AM EST  | Comments
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In the Headlines

Futures action Friday pointed to a lower open, with traders taking a breather after Thursday's lower-volume rebound on the major indices.

There are no major econ reports due out today; the February jobs numbers are set for release next Friday. One closely watched event is today's IPO from local-business online review publisher Yelp.

In Europe, indices were trading mixed early Friday. Yesterday, finance officials in the eurozone said Greece would get its bailout money upon completion of a bond swap with its private-sector lenders. Financials were among gainers in European trade on Friday.

In Asia, stocks finished Friday's session with gains. Here, too, financials performed well, buoyed by optimism that the Greek bailout was moving forward as planned.

Commodity Corner

Looking at commodities, West Texas Intermediate crude fell by $0.90 per barrel, to $107.94. The price spiked above $110 per barrel in Thursday's trade, following rumors that pipelines in Saudi Arabia had exploded. Saudi Arabia denies the report, which originally appeared on an Iranian website.

Gold, which rebounded somewhat Thursday after Wednesday's sharp selloff, was trading to the downside again early Friday. The precious metal lost $8.00 per ounce, to $1,714.20 in Comex trade.

Earnings

As usual, Friday brings fewer earnings reports. S&P 500 component Big Lots (BIG) reported fourth-quarter income of $1.75 a share, topping views by 2 cents. Sales were $1.67 billion, slightly ahead of expectations, which called for $1.66 billion.

The Ohio-based company said it would open 23 new U.S. stores. Big Lots rose $0.36 in early trade, a gain of 0.81%, to $44.85.

Before today's report, Big Lots shares had been trading at multiyear highs.

Shoe and clothing retailer Genesco (GCO) is also slated to report early today. The operator of Journeys, Lids and Johnston & Murphy stores is expected to earn $1.67 per share on revenue of $723.05 million. The stock has been rallying to all-time highs.

Market Movers

Premarket movers included Google (GOOG), advancing $0.31, a fractional gain, to $622.71. The company launched an airline reservation system, designed to compete with more established online travel sites.

On the downside, First Solar (FSLR) continued its tumble, shedding $0.11 in early trade, a decline of 0.36%, to $30.31.

Analyst Actions

Analyst actions early Friday included a KeyBanc downgrade of trucker J.B. Hunt (JBHT) to Hold from Buy. The analyst cited increased competitive bids and share price valuation. Shares of J.B. Hunt have been consolidating recently above their 10-week line.

Citigroup downgraded accessories retailer Fossil (FOSL) to Neutral from Buy. Citi said valuation and absence of near-term catalysts were behind the move. It recommended moving into shares of Movado (MOV) instead.

From a related retail category, women's clothier Ann Inc. (ANN), operator of Ann Taylor stores, was upgraded to Buy from Neutral at SunTrust. The analyst cited improved merchandising and valuation, among other factors. Shares have been meandering below their 52-week high of $32.49, from May 2011.

IPO Corner

Yelp's IPO will be among the closely followed transactions on Wall Street today. The company priced 7.15 million shares at $15 apiece, above the planned range of $12 to $14. It begins NYSE trade today under the ticker YELP.

Consumer-content Internet plays are generally closely watched. Analysts expect this will be the final such IPO prior to Facebook's public-market debut.

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