The Day Ahead: 2011's Last Hurrah

 | Dec 30, 2011 | 8:32 AM EST  | Comments
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Investors and traders are prepared to put 2011 in the books as Wall Street futures point to a moderately higher open Friday.

Before the start of trade, the S&P 500 sported a gain of 0.43% for the year, the DJIA was up 6.13% and the Nasdaq Composite showed a decline of 1.48%.

Europe remains at center stage, as it has for much of this year. Trade was quiet on European bourses Friday, as expected. Most indices were showing moderate gains, although London's FTSE 100 was trading to the downside.

Though traders had initially shown some optimism over results of Italian bond auctions earlier this week, nervousness gradually set in, keeping a lid on upside equities trade.

Elsewhere, Germany's finance minister gave an interview that put the kibosh on a euro breakup – from his perspective, anyway. He predicted stabilization of the region's financial crisis in 2012.

In a development that likely surprised no one, the International Monetary Fund told Greece that it may not be able to slash debt levels enough to reach targets.

Major indices in Asia closed higher in a pre-holiday session that brought light trading volume.

There are no major economic reports due out today, following better-than-expected U.S. data on Thursday in the categories of jobs, manufacturing and housing.

The earnings calendar is also light, with no significant corporate reports Friday.

Looking at commodities, crude oil fell $0.22 per barrel in electronic trade, to $99.43.

Gold, which headed into Friday's session showing a loss for the week, was attempting a rebound this morning. The yellow metal was up $27.20 per ounce, to $1568.10 in Comex trade.

Early Movers

Premarket price leaders included Mead Johnson Nutrition (MJN), bouncing $1.61, 2.35%, to $70.25 ahead of the bell. The stock skidded 10.5% last week in enormous volume as retailers removed the company's Enfamil newborn formula from shelves on fears that the product was contaminated. Tests revealed no presence of the bacteria blamed in the death of an infant earlier this month.

On a lighter note, McDonald's (MCD), the DJIA's biggest price gainer this year, added to its strength early Friday. Shares of Mickey D's rose $0.59, 0.59%, to $101.40 in the premarket. The stock is up 31.3% in 2011. Earnings have been growing at double-digit rates in the past several quarters, something not always seen in mature mega-caps. Sales of the McCafe line of coffees are among factors driving sales.

Open source software maker Red Hat (RHT) jumped $0.41, 0.99, to $42 in the premarket. The stock gapped down 8.9% on Dec. 20, following the company's report of slower growth in client billings.

DJIA component Johnson & Johnson (JNJ) slipped $0.08 to $65.80 in early trade. On Thursday, the company said it had requested Food and Drug Administration approval for Xarelto, an anti-clotting treatment for patients with acute coronary syndrome, which restricts blood flow to the heart.  J&J shares are up 6.52% for the year.

American Airlines parent company AMR (AMR) fell $0.20 to $0.31, a loss of 39.3%. Shares will be delisted from the NYSE next week.

Analyst Actions

Piper Jaffray's telecom analyst was busy initiating coverage on three carriers: Cincinnati Bell (CBB), Frontier Communications (FTR) and Windstream (WIN), which were all started with ratings of Neutral.  Cincinnati Bell boasts a gain of 9.6% for the year, while Frontier is down 50.7%, and Windstream has shed 15%.

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