The Day Ahead: Holiday Cheer

 | Dec 22, 2011 | 8:14 AM EST  | Comments
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In the Headlines

Stocks appeared ready to open higher Thursday, ahead of a boatload of U.S. econ data. A Fitch warning that debt levels in the U.S. could hurt the nation's credit rating failed to ding NYSE and Nasdaq futures.

In Europe, stocks showed significant gains before an Italian parliamentary vote on austerity plans. Financials were among the biggest gainers in European trade. The euro was up vs. the dollar early Thursday.

Elsewhere, Asian indices finished mostly lower, with analysts attributing the trading patterns to a combination of Europe-related worries and some profit-taking after a rally earlier in the week.

West Texas Intermediate crude was up $0.33 in electronic trade, to $99 per barrel. Gold, meanwhile, slumped by $1.40 an ounce, to $1,612.20.

Economic Docket

It's a busy morning for domestic econ news. At 8:30 a.m. EST, the Labor Department releases its weekly data on unemployment claims. Forecasts call for 380,000 new filings. The number came in below expectations in the past two weeks, so this release is sure to be closely watched this morning.

Also at 8:30 is the final revision of third-quarter GDP. Economists are eyeing a 2% growth rate, unchanged from the previous estimate.

At 9:55, the University of Michigan releases its final consumer sentiment reading for December. It's expected to come in at 68, up slightly from the prior level of 67.7.

Five minutes later, the U.S. Federal Housing Finance Agency releases its Home Price Index for long-ago October. Partly because of the lag, this report generally doesn't get much market attention. Economists see a gain of 0.3% over September.

Also at 10 a.m., the Conference Board issues its leading indicators report. In what sounds like a misnomer, the report contains November data. Here, too, a gain of 0.3% in the index is expected.

Earnings

The pace of earnings reports slows down today and doesn't pick up through the end of the year. The most notable report comes from American Greetings (AM), expected to report third-quarter earnings of $0.81 per share on sales of $439.43 million.

Those would be year-over-year increases on the top and bottom lines, reversing a trend of declines in the past several quarters.

Market Movers

In company news, Yahoo! (YHOO) is reportedly in discussions to sell its Asian assets for around $17 billion. Analysts don't expect a decision to be reached this week, but shares were up $0.31, 1.94%, to $16.30 ahead of the bell.

Bank of America (BAC) advanced $0.02, 0.38%, to $5.25 in early trade. On Wednesday, the company agreed to a settlement of $335 million to settle charges that its Countrywide unit had discriminated against black and Hispanic mortgage customers.

Offshore oil driller Transocean (RIG) rose $0.44, 1.10%, to $40.32, despite news that a Brazilian agency is considering indictments related to last month's oil spill off the coast near Rio de Janeiro. Chevron (CVX) employees may also be named, according to reports.

Analyst Actions

Micron (MU) rose $0.09, 1.62%, to $5.63 in the premarket. On the heels of Wednesday's first-quarter results, the stock was upgraded to Outperform from Neutral at Wedbush.

However, Deutsche Bank lowered its price target to $7 from $8, and Goldman Sachs recommended that investors avoid the stock, citing excess capacity in its DRAM business.

Other analyst actions early Thursday included a BB&T upgrade of Advance Auto Parts (AAP) to Buy from Hold. The company's earnings growth has accelerated in the past two quarters, and its chart is showing a potentially bullish price consolidation above its 10-week moving average.

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