The Day Ahead: Lifting Into the Weekend

 | Nov 11, 2011 | 8:20 AM EST  | Comments
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In the Headlines

Optimism about developments in Italy and Greece pushed worldwide stocks moderately higher on Friday. U.S. stock futures were also poised for a positive open.

Italian lawmakers are expected to approve austerity measures before the weekend ends, and Mario Monti appears to be on deck to become the new prime minister. However, internecine politics still cast doubt over the inevitability of a new government actually stepping in and being able work with the European Central Bank to create economic growth.

Yield on the Italian 10-year bond continued easing below the 7% mark.

In Greece, former ECB official Lucas Papademos is set to be sworn in, along with a new cabinet.

The euro edged up vs. the dollar ahead of Wall Street's open.

Asian stocks closed Friday higher after Wall Street's upside finish in Thursday's low-volume session. Asia's exporters, which have high exposure to Europe, were among session gainers on cautious optimism about the latest round of developments.

It's Veterans Day, so U.S. bond markets are closed. Equity markets will trade regular hours.

Economic Docket

The only piece of closely watched econ news scheduled for today is the University of Michigan's preliminary consumer sentiment reading for October. Economists expect an improvement to 62 from 57.5 in October.

Commodity Corner

Crude oil continued its rise early Friday, gaining $0.26 per barrel, to $98.04.

Gold, which ended the past two sessions lower, advanced $7.70 per ounce to $1,767.30 in electronic trade.

Earnings

It's typical for the earnings calendar to lighten up on Fridays (particularly because few U.S.-based companies report after the close), and today is no exception.

Before the open, homebuilder D.R. Horton (DHI) reported its fourth quarter. It earned $0.11 a share on revenue of $1.1 billion. That was 3 cents below profit views, but roughly in line with revenue expectations. The company said its sales backlog grew, a good sign heading into the new fiscal year.

The company is showing a profit decline for fiscal 2011, but is earnings are expected to grow 88% next year.

Market Movers

Nvidia (NVDA) was a premarket gainer, jumping $0.63, 4.35%, to $15.10. Late Thursday the maker of graphics processing chips said third-quarter results topped views, as demand from gamers and designers boosted sales.

DJIA component Walt Disney (DIS) climbed $1.28, 3.70%, to $35.92 in early trade, following yesterday's fourth-quarter earnings beat on strong results from theme parks and TV advertising.

Prior to October's gain of 15.6%, Disney shares had dropped for five months in a row.

E*Trade (ETFC) fell $0.38, 4.01%, to $9.10 ahead of the bell, following yesterday's news that the company is not for sale. For the past few months, the online brokerage has been evaluating its options, but ultimately decided that its current business plan would deliver the most value to shareholders.

Analyst Actions

Biotech Dendreon (DNDN), a stock that's been battered almost beyond recognition since August, got a little boost Friday from a Bernstein upgrade to Market Perform from Underperform. The analyst cited valuation, potential sale of the company and a possible restructuring.

Shares rose $0.18, 2.48%, to 7.45% in premarket trade. However, it's down 79.18% so far this year.

Nomura initiated coverage on eBay (EBAY) and Amazon (AMZN), giving each a rating of Neutral. Amazon has stated its support for an Internet sales tax, while eBay opposes such a measure.

Amazon was up $1.11 in the premarket, a gain of 0.53%, to $211.90.

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