The Day Ahead: All Eyes on Sales Data

 | Dec 01, 2011 | 8:36 AM EST  | Comments
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Stock quotes in this article:

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ulta

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yhoo

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bx

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dis

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pg

In the Headlines

Traders seemed ready to catch their breath early Thursday, following Wednesday's heavy-volume race higher after central banks injected liquidity into the system. Economic data also lifted investor sentiment in yesterday's session. NYSE and Nasdaq futures point to a flat open.

In Europe, most indices were trading to the downside, with decliners outpacing advancers on France's CAC 40 and Germany's DAX. In the U.K., stocks rallied on the FTSE 100, with financials and resources stocks leading the charge. The euro continued with its lead over the dollar.

Bulls took charge on Asian indices, which ended Thursday with significant gains on the heels of Wall Street's huge rally.

The dollar index fell ahead of U.S. trading this morning. Meanwhile, gold added to Wednesday's gains in early electronic trade. The precious metal advanced by a dime, to $1750.40 per ounce this morning. Crude oil shed $0.02, to $100.34 per barrel.

Economic Docket

At 8:30 a.m. is the weekly jobless claims report from the Labor Department. Analysts expect a decline of 3,000, new filings to 390,000.

At 10 a.m., the Institute for Supply Management releases its manufacturing index for November. Economists expect a reading of 52, up from October's 50.8.

Also at 10 a.m., the Commerce Department issues October construction spending data, seen rising 0.3%. September's increase was 0.2%.

Sales Data

Automakers report November sales throughout the day. Industry analysts forecast a big increase, driven by Black Friday purchases.

Black Friday data will also factor going into November chain-store sales, which retailers begin to release today. Costco (COST) said same-store numbers trounced views, showing a gain of 9%, spurred by gasoline purchases.

Earnings News

Earnings reports before today's open included third-quarter results from growth leader Lululemon Athletica (LULU). The company reported income of $0.27 per share and revenue of $230 million. Analysts had expected income of $0.25 a share on sales of $235.74 million. Some company-watchers have fretted about higher costs and inventory shortages that have potential to squeeze margins in the quarter. Shares have been consolidating since July, and closed Wednesday beneath key moving averages. Lululemon shares tumbled $5.46, 11%, to $44.24 in premarket trade.

After the bell, another growth stock reports. Ulta Salon, Cosmetics & Fragrance (ULTA) is expected to earn $0.38 a share, with sales coming in at $406.5 million, topping year-ago results. Ulta, which went public in October 2007, rallied to an all-time high last month. Shares closed Wednesday about 8% below that peak, holding above the 50-day line.

Early Movers

Yahoo! (YHOO) shares bolted $0.86, 5.4%, to $16.57 in the premarket. According to reports, Bain Capital and Blackstone (BX) are assembling a group that would bid on Yahoo in its entirety. Chinese Internet firm Alibaba, which Yahoo has a major stake in, may be a stumbling block as the company's main interest is buying back its own shares from Yahoo.

In addition to Yahoo, a premarket gainer was Walt Disney (DIS), jumping $0.35, 1%, to $36.20. The DJIA component raised its annual dividend by 50%, to $0.60 per share, following strong results in fiscal 2011.

On the downside, Pfizer (PFE) fell $0.12 to $19.95. India-based Ranbaxy Laboratories won FDA approval for its generic version of cholesterol drug Lipitor, which has been a blockbuster for Pfizer.

Analyst Actions

Analyst moves early Thursday included RBC Capital's upgrade of Procter & Gamble (PG) to "Outperform" from "Sector Perform." The analyst cited improved fundamentals, share price valuation, margin trends and growth potential. P&G shares rose $0.09 to $64.66 in early trade.

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