The Day Ahead: Futures Showing Slight Gains

 | Dec 06, 2011 | 8:24 AM EST
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In the Headlines

NYSE and Nasdaq futures were showing moderate gains Tuesday. Standard & Poor's (S&P) warning that it would downgrade eurozone nations had no effect on early Wall Street trading, but European indices were showing mixed trade this morning. Germany's DAX was the weakest performer among the majors.

After Monday's close, the rating agency released its unusually short-termed credit watch, saying it would issue downgrades if politicians failed to come up with a debt-crisis solution at Friday's summit.

The euro showed fractional gains vs. the dollar before Wall Street's open, continuing to hold above last month's lows.

Asian stocks closed with losses Tuesday, slipping on the S&P's eurozone warning.

There are no significant U.S. economic reports due out today, although the pace will pick up somewhat later this week.

Commodities Corner

Crude oil gained $0.02 per barrel, to $101.01 in electronic trade.

Gold, which has shown losses in the past three sessions, shed $11.50, to $1,723 per ounce in early Comex trade Tuesday.

Earnings News

In earnings news, S&P 500 component AutoZone (AZO) said first-quarter earnings topped views, coming in at $4.68 per share vs. estimates of $4.44. Revenue also beat, with the company reporting $1.92 billion vs. expectations for $1.89 billion. The company said same-store sales were up 4.6% in the quarter. After pulling back from November's all-time high, the shares have been consolidating in recent weeks.

Fellow benchmark index component SAIC (SAI) is scheduled to report third-quarter earnings after the bell. The company, which provides of technical and engineering services to government clients, is expected to earn $0.34 a share on revenue of $2.75 billion. Those would mark declines on the top and bottom lines. SAIC shares are down nearly 23%, year-to-date.

Early Movers

Among premarket movers, Google (GOOG) shed $0.15, a fractional loss, to $625.50. According to reports, the company said Verizon (VZ) is blocking its Google Wallet payment software because it has a rival mobile transaction venture in partnership with AT&T (T) and T-Mobile.

Ford (F) dropped $0.03, 0.27%, to $11.08 ahead of the bell. The company is denying reports that it is searching for a replacement for CEO Alan Mulally, rumored to be leaving the company in two years.

Oil-services company Schlumberger (SLB) rose $0.85 in premarket trade, a gain of 1.10%, to $78. The company said it would sell its rig management unit to Canada's Saxon, in which it owns a stake.

After slashing its second-quarter guidance, Darden Restaurants (DRI) tumbled $4.21, or 8.82% in early trading, to $43.52. The company said guest counts at its Olive Garden chain were dwindling, and price increases had not made up for higher input costs.

Analyst Actions

Analyst actions Tuesday included a JP Morgan upgrade of LinkedIn (LNKD) to Overweight from Neutral. The analyst said valuation and operational performance factored into the move. JPMorgan also lowered its price target on the stock to $84 from $98. LinkedIn shares rose $2.50, 3.57%, to $72.45 in early trade.

OpenTable (OPEN), which went public in 2009 and whose shares have been pummeled this year, was initiated with a rating of Neutral at Piper Jaffray.

The stock gained 7.9% Monday, to $39.10 in above-average volume. The company said last week it was beginning a $50 million share buyback program. OpenTable shares are down 44.52%, year-to-date.

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