The Day Ahead: Optimism Holds

 | Oct 05, 2011 | 8:30 AM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

mon

,

mar

,

yhoo

,

syy

,

nflx

In the Headlines

The optimism that sent stocks soaring in the last 30 minutes of Tuesday's session carried over into Wednesday's premarket, as NYSE and Nasdaq futures pointed to a higher open.

Despite the upside reversal, it's worth remembering that stocks plunged to their lowest levels in more than a year before the afternoon rally.

European indices traded in positive territory ahead of the U.S. session, despite a Moody's downgrade of Italy's bond rating. Financials in Europe were among gainers following yesterday's news that the region's finance officials are considering how to implement a coordinated effort to recapitalize banks.

In Asia, stocks slipped, but not as sharply as earlier in the week. Markets in Hong Kong and mainland China were shuttered for a holiday. Japan's financials closed lower, as did exporters with exposure to Europe.

Economic Docket

It's a busy day for economic news. The Mortgage Bankers Association said loan applications fell 4.3% last week, following a surprise uptick in the prior reading.

Higher profile news came from executive outplacement firm Challenger Gray & Christmas, which released its September job cuts report. It found that 115,730 jobs were eliminated last month, more than double the August total. Government agencies and the military posted big declines last month.

There is more employment data at 8:15 a.m. EDT, as payroll services firm ADP issues its jobs tally for last month. Analysts expect that employers added 75,000 new workers.

At 10 a.m., the Institute for Supply Management releases its services index. Because this number tends to be less cyclical and volatile than the manufacturing index, it generally doesn't get as much market attention. Economists expect a reading of 52.9 in September, down from 53.3 in August.

Thirty minutes later, the Energy Department will release its weekly count of crude-oil reserves. Analysts expect an increase, due to greater imports.

Commodities Corner

West Texas Intermediate crude rose $2.43 ahead of the open, to $78.10 per barrel.

Gold advanced $1.90 in early Nymex trade, to $1,617.90 per ounce.

Silver, meanwhile, fell $0.609 to$29.23 per ounce.

Earnings News

In earnings news, Costco (COST) said fourth-quarter earnings were $1.08 per share, below views of $1.10. Sales were $28.18 billion, topping expectations for $27.81 billion. Including effects of rising gasoline prices and foreign currency exchange, same-store sales rose 12%, year over year. The company said it would raise membership fees, beginning next month.

Seed and agricultural products maker Monsanto (MON) is also due to report before today's open. It's expected to report a fourth-quarter loss of $0.27 on revenue of $1.89 billion. Heading into Wednesday's session, Monsanto shares were down 9.61% so far this year.

After the bell, hotel chain Marriott International (MAR) is set to report its third-quarter results. Analysts are anticipating income of $0.27 a share and revenue of $2.83 billion. Those would mark year-over-year increases.

Early Movers

Premarket gainers Wednesday included Yahoo! (YHOO), advancing $0.33, 2.28%, to $14.79. The company is reportedly preparing to put up the "for sale" sign. Its advisors are Goldman Sachs and Allen & Co. The stock is already up 9.8% for the week as traders anticipated the move.

On the downside, food wholesaler Sysco (SYY) tumbled $2.81, 11.02%, to $22.70 ahead of the open. Last week, a research firm's channel checks showed weakening demand for the company's products. The stock is working on its fifth month in a row of downside trade.

Analyst moves ahead of the bell included Sterne Agee's initiation of coverage on Netflix (NFLX) with a rating of Neutral. The analyst said the stock's current valuation reflects long-term risks. Netflix shares rose $1.10, 0.96%, to $116 in premarket trade.

Columnist Conversations

Market posts the third day of solid gains in a row. Will see if we can make it four a row before the long hol...
With the averages now flying upwards, with everyone scrambling to buy, it is startling to remember how palpabl...
Inability of Bank of America (BAC) to claw its way above 16.30-.40 resistance will increase the likelihood tha...
The Fed works for the government. The Federal government owes over $16 trillion. The Fed will likley never rai...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.