The Day Ahead: A Bounce to End the Week

 | Nov 18, 2011 | 8:29 AM EST  | Comments
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Stock quotes in this article:

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In the Headlines

Stocks were attempting a rebound early Friday, with Wall Street futures indicating a higher open.

European stocks reversed higher from earlier losses and moved into positive territory. U.K.'s FTSE 100 continued to show a loss but had also improved significantly from previous lows. Bond yields on Spanish and Italian 10-year bonds remained below the 7% level, which traders around the world had been eyeing.

Meanwhile, new European Central Bank president Mario Draghi has called for the eurozone rescue fund to be up and running as soon as possible. The region's governments continue to disagree on how much the central bank should intervene in the region's debt crisis.

In Asia, stocks closed sharply lower Friday following rising interest rates on Spanish 10-year bonds after an auction yesterday.

Economic Docket

The U.S. economic calendar is sparse today. At 10 a.m. EST, the Conference Board issues its report on leading indicators. This is essentially a compendium of previously released data. Economists expect the numbers to show an overall rise of 0.6% in October.

It's the third Friday of the month, so that means options expire today. This typically brings higher trading volume, though there are occasional exceptions to that general rule.

West Texas Intermediate hovered below the century mark in early Nymex trade, gaining $0.81 per barrel to $99.63.

Gold bounced back somewhat from Thursday's tumble, adding $14.20 per ounce to $1,734.40 in electronic trade.

Earnings

Ketchup maker H.J. Heinz (HNZ) reported its third quarter this morning, with income coming in at $0.81 a share on revenue of $2.83 billion. Analysts had expected earnings of $0.80 per share on revenue of $2.91 billion. The company reiterated its 2012 earnings view of $3.24 to $3.32 per share.

The stock has been consolidating since early June, and has repeatedly hit price resistance between $54 and $55. Heinz shares fell $0.32, 0.61%, to $52.50 in premarket trade.

Women's clothing retailer Ann Taylor (ANN) also reported before the bell. The company earned $0.61 a share on sales of $564 million in the third quarter. Analysts had expected income of $0.57 per share and revenue of $566.49 million.

In the earnings release, the company cited its Loft line of stores as a particular standout.

Market Movers

Premarket movers Friday included enterprise software maker Salesforce.com (CRM), dropping $8.99, 7.13%, to $117.10. Late Thursday the company reported earnings of $0.34 per share, ex-items, ahead of views. However, its outlook suggested that lukewarm corporate spending would hamper growth.

Copper and gold miner Freeport-McMoRan (FCX) climbed $0.86, 2.34%, to $37.69 in early trade. Before Friday's open, the stock was down 7.6% for the week. It gapped lower on Thursday as copper and gold both showed big declines.

IPO Corner

The IPO market, which has heated up in recent weeks, yielded two new pricings last night. Investment management firm Manning & Napier sold 12.5 million shares at $12 each, for a total of $150 million. Shares were priced below the proposed range of $15 to $17. The stock will list on the NYSE under the symbol MN.

In another small deal, retailer Mattress Firm Holdings raised $106 million in an offering of 5.6 million shares at $19, the high end of its planned range. The company operates 811 stores in 25 states, mostly in the South and Midwest. Shares will begin Nasdaq trade today under the ticker MFRM.

Analyst Actions

Analyst actions Friday included some attention to Chinese wireless chipmaker Spreadtrum Communications (SPRD), which has risen a stunning 105% in the past four months.

JPMorgan and Credit Suisse both noticed the stock, with JP Morgan starting the stock with a rating of Overweight and Credit Suisse giving the nod with an Outperform.

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