The Day Ahead: Upside Start to the Week

 | Aug 22, 2011 | 8:17 AM EDT
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In the Headlines

U.S. stock futures indicated a sharply higher open Monday as European stocks also rallied.

With Libyan rebels reportedly close to toppling the regime of Moammar Gadhafi, energy stocks were some of the best performers in markets around the world. A decline in oil prices should follow a regime change in Libya, if oil supplies come back online as a result. However, in European trade, energy stocks got a boost on hopes that oil companies would see their production levels resume.

Nymex crude advanced $0.93 early Monday, to $83.19 per barrel.

Gold, meanwhile, just kept going, approaching the $1,900 level early Monday. The price of the metal climbed $23.80 before Wall Street's open, to $1,876 an ounce.

In addition to energy stocks moving higher on European indices, financials there rebounded Monday. In a weekend TV interview, German Chancellor Angela Merkel appeared to leave the door open to consideration of a eurobond at some point.

The euro edged higher early Monday.

Asian stocks finished Monday's session mixed. Japan's Nikkei dropped 1.05% as a strong yen weighed on the nation's exporters. The Bank of Japan has said it would take steps to ease monetary policy to curb the currency's run, if needed.

The yen was trading lower early Monday.

Economic Docket

There are no major economic reports scheduled for today, but investors are eagerly awaiting a speech from Fed Chief Ben Bernanke later this week at the Jackson Hole meeting. Markets will be listening closely for clues about the Fed's next moves to revive the economy. At last year's gathering, Bernanke gave the first statement about QE2.


There are still some S&P 500 components trickling with earnings reports this week, but Monday's calendar is light on the news from big-caps.

Micro-cap Tuesday Morning (TUES), a closeout retailer of home furnishings and clothing, is due out with fourth-quarter results after today's close. The Dallas-based company is expected to report a loss of $0.04 per share on sales of $194.80 million.

Those results would mark top- and bottom-line deterioration from a year ago. The company's shares trade in the single digits, and are down 34.66% year-to-date.

Market Movers

Early price movers Monday included oil-services firm Halliburton (HAL), bouncing back following a 6.9% decline Friday. Shares rose $1.41, 3.71%, to $39.45 ahead of the bell.

DJIA component Hewlett-Packard (HPQ) also saw some buying in the premarket, as investors scooped up shares after Friday's 20% gap down. Last week the company said it would buy British enterprise software maker Autonomy, marking a shift toward tech services and away from the consumer PC market.

Shares climbed $0.37, 1.57%, to $23.97 in early trade.

MasterCard (MA) jumped $4.50, 1.5%, to $304.66 before the open. The stock fell along with the general market last week, but found support at its 10-week average. The company's revenue growth has accelerated in recent quarters.

Analyst Actions

Analyst actions early Monday included a Needham upgrade of retailer Hibbett Sports (HIBB) to Strong Buy from Buy. The company delivered better-than-expected second-quarter results last week, a factor Needham cited in its upgrade.

Athletic clothing maker Under Armour (UA) got the nod from a couple of analyst shops Monday. Canaccord initiated coverage with a rating of Buy. Capstone upgraded the stock to Buy from Hold, citing valuation and growth expectations.

Sales and earnings at the Baltimore-based company have been trending higher in the past few quarters. Wall Street sees profit up 34% this year and 26% in 2012.

Columnist Conversations

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