In the Headlines
Apple (AAPL) shares dropped early Thursday, as traders reacted to the death of Steve Jobs. The stock was trading at $374.18, down $4.07, 1.08% in premarket trade.
With a market cap of $350 million, Apple is the second-heaviest weighting within the S&P 500, after Exxon Mobil (XOM), and it's the biggest within the Nasdaq 100.
Earlier this week, Apple shares had slumped on disappointment about the Tim Cook-led iPhone press conference, which unveiled updates to the iPhone 4, the iPhone 4S rather than an iPhone 5, as had been widely expected. However, the chart reveals something significant about the intraday trade: Apple shares fell only to the point of their 200-day line, where they saw support. Institutional buyers stepped in to show their confidence in the company.
This morning, that confidence was still apparent. Shares continued to hold up technically, trading well above the 200-day average before the market's open. That was an indication that traders were not bailing out of the stock en masse in reaction to the loss of the company's founder and visionary.
Major U.S. indices were heading for a positive open Thursday, but had moved off earlier highs following the European Central Bank's (ECB) announcement that it would leave its key interest rate unchanged at 1.5%.
After two strong sessions in a row, the DJIA is up 0.2% for the week, the S&P 500 is up 1.1%, and the Nasdaq Composite 1.9%.
Overseas markets also showed gains Thursday. In Europe, stocks remained in solidly positive territory after the ECB news. It's the last policy meeting for outgoing ECB chief Jean-Claude Trichet, who will deliver the usual post-meeting press conference this morning. Traders and analysts will be listening for signals of policy shifts after new chief Mario Draghi takes the reins next month.
Before the ECB announcement, the Bank of England said it would leave rates unchanged, and that it would inject funds into the market in an effort to stimulate the economy.
Meanwhile, published reports said eurozone financial regulators were considering new bank stress tests. This time, the models would factor in effects of sovereign-debt losses, something the last round of stress tests ignored.
Asian stocks got a boost on optimism that eurozone officials were taking concrete steps to address the debt crisis. Wednesday's better-than-expected economic data from the U.S. also spurred optimism among traders.
We will receive more closely watched stateside economic news today, as the Labor Department releases its weekly data on jobless claims. Economists expect the number of new claims to come in at 411,000, up from the prior week's total of 391,000.
Chain stores are set to release same-store sales today, with analysts anticipating an average gain of 4.6%. One of this morning's early reporters, Limited Brands (LTD), said September comp sales were up 11%. Late Wednesday, fellow clothing chain Zumiez (ZUMZ) said same-store revenue rose by 10.1%, beating views.
Turning to commodities, gold advanced $10.30 per ounce to $1,651.90 in early Nymex trade.
Silver was up $1.033 an ounce, to $31.38.
Copper, sensitive to global economic forecasts, climbed $0.1215, to $3.23 per pound in electronic trade.
Crude oil advanced $1.13 per barrel, to $80.81.
In earnings news, S&P 500 component Constellation Brands (STZ) is scheduled to report its second-quarter results before the open. The distributor and importer of alcoholic beverages is expected to earn $0.66 per share on sales of $667.87 million. The company's brands include Corona, Clos du Bois, Robert Mondavi, Ravenswood and Black Velvet, among many others.
In addition to Apple, premarket movers included Corning (GLW). The maker of components for fiber optic gear and LEDs said Wednesday that its board had approved a $1.5 billion share buyback. The company also increased its dividend to $0.075 per share, up from nickel a share. Corning was up $0.60, 4.76%, to $13.20.
On the downside, Express Scripts (ESRX) tumbled in premarket trade after slashing its full-year earnings guidance. Shares skidded $1.95, 5.43%, to $33.99 ahead of the bell. The stock had already been in trouble, shedding 33.51% year-to-date.
Early analyst actions Thursday included a William Blair downgrade of two restaurant chains. P.F. Chang's China Bistro (PFCB) and Chipotle Mexican Grill (CMG) were demoted to Market Perform from Outperform. The analyst cited food cost pressures on both companies.
Chipotle shares fell $2.79, 0.93%, to $298 in early trade. Shares in the momentum leader have stalled recently, and are currently perched between their 50-day and 200-day averages.