The Day Ahead: Quiet Start to the Week

 | Nov 14, 2011 | 8:50 AM EST
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In the Headlines

Wall Street futures pointed to a moderately lower open Monday, mirroring European trade. Markets have calmed down somewhat since Greece and Italy named new prime ministers. However, there's still plenty of room for concern about the financial situation in both those countries, and in the wider eurozone.

Yields for Italy's five-year bonds rose to 6.29% in an auction this morning. Traders around the globe had been monitoring demand levels for Italy's debt after the change in government.

Major European indices traded to the downside before Wall Street's open, and the euro slipped lower vs. the dollar. Asian indices began the week with gains on some initial optimism about the changes in Italy. News that Japan's GDP rose 6% last quarter also spurred buying.

There are no major U.S. econ reports due out today, but the pace picks up tomorrow.

Commodity Corner

Gold, which has trended higher over the past three weeks, slumped $11.50 in early Comex trade, to $1,776.60 per ounce.

West Texas Intermediate crude continued marching back toward the century mark. It advanced $1.62 to $98.12 per barrel in electronic trade.


It's a big day for high-profile retail earnings.

Home improvement giant Lowe's (LOW) reported its third quarter before the open. The company earned $0.35 per share, 2 cents ahead of views. Revenue also beat, coming in at $11.85 billion, vs. expectations of $11.69 billion.

J.C. Penney (JCP) is expected to report a third-quarter loss of $0.12 per share on sales of $4.06 billion. Shares have risen for the past seven weeks, but still have quite a bit of ground to make up before retaking their 52-week high from May.

CEO Ron Johnson is reportedly recruiting colleagues from his former employer, Apple (AAPL), to join him at J.C. Penney.

After the close, Urban Outfitters (URBN) is set to report its third quarter. Wall Street sees profit coming in at $0.32 per share on sales of $626.43 million. That would mark a year-over-year decrease in earnings, and an increase in revenue. As the earnings performance has deteriorated in recent quarters, the stock price has also slumped. Shares are down 25% year-to-date.

Market Movers

Premarket movers Monday included DJIA component IBM (IBM), advancing $2.10, 1.12%, to $189.48. Warren Buffett said in a TV interview this morning that he has been buying into the company recently. With some help from Buffett, shares have notched gains in the past three months.

Another blue-chip, Boeing (BA), also advanced in early trade. Emirates Airlines agreed to buy 50 of Boeing's 777 planes, in a deal valued at $18 billion. The airline has an option to buy 20 more, for an additional $8 billion.

Boeing shares flew $1.98, 2.96%, to $68.90 in the premarket.

Bank of America (BAC) slipped $0.03 in early trade, a loss of 0.48%, to $6.18. The company said it would sell about 10.4 billion shares of China Construction Bank through private transactions. It's the latest in BofA's series of moves to generate capital and clean up its balance sheet.

Analyst Actions

Analyst actions early Monday included a Goldman Sachs upgrade of Caterpillar (CAT) to Conviction Buy from Buy. Last week, Caterpillar said it would build a mining truck plant in Indonesia, expand capacity at a U.S. facility and build more plants in China.

Caterpillar shares were up $0.62, 0.64%, to $96.75 ahead of the open.

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