Opening View: DJIA Readies for Another Triple-Digit Drop

Date:2011-09-07lile  Text Size:


 

United Technologies (UTX - 71.04) this morning reiterated its full-year outlook. Specifically, the firm reaffirmed its expectations for earnings of $5.35 to $5.45 per share on sales of roughly $58 billion. Analysts, on average, were calling for slightly higher 2011 earnings of $5.46 per share on revenue of $58.32 billion.

Fairchild Semiconductor International (FCS - 12.48) trimmed its third-quarter revenue outlook, citing lower-than-expected demand from its distributors. The firm now expects sales between $400 million and $410 million, compared to its previous guidance for sales of $433 million to $446 million. Wall Street, meanwhile, had forecast higher third-quarter sales of about $439.5 million for the chip maker.

Dell Inc. (DELL - 14.24) said it's partnered up with Baidu Inc. (BIDU - 140.45) to develop tablets and mobile phones for the Chinese market. According to local media reports, a new mobile phone or tablet carrying the Baidu name could be available as early as November. "We have a partnership with Baidu and you know we have the Streak 5 tablet, so the partnership will be in that space," a Dell spokeswoman told Reuters. Ahead of the bell, the shares of BIDU are trading about 3.1% lower, while DELL has shed roughly 1.1%.

Earnings Preview

Today's earnings docket will feature reports from Altera ( ALTR ), FuelCell Energy ( FCEL ), KongZhong ( KONG ), Pep Boys ( PBY ), and VeriFone Systems ( PAY ). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The ISM services index for August is due out today, while the Fed's Beige Book report for September will hit the Street on Wednesday. Thursday features the usual weekly report on jobless claims, as well as July's trade balance. Crude inventories are also due out one day later than usual, thanks to Monday's holiday. On Friday, wholesale inventories for July will round out the week's economic calendar.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 725,864 call contracts traded on Friday, compared to 606,779 put contracts. The resultant single-session put/call ratio arrived at 0.84, while the 21-day moving average was 0.78.

 

The summer 2011 issue of SENTIMENT magazine is now available here.

Overseas Trading

Stocks in Asia ended mostly lower today, pressured by familiar concerns about European debt and the U.S. economy. Against this backdrop of macroeconomic uncertainty, energy and resource issues were hit particularly hard. In fact, Tokyo-listed equities dropped to their lowest close in more than two years, and tagged their worst intraday price since the aftermath of the March tsunami. Meanwhile, Shanghai's benchmark tumbled to a 13-month nadir, while Seoul-listed securities swallowed their third straight day of losses. However, Hong Kong managed to eke out a win, as bargain-hunters crept into the market following recent declines. By the close, Japan's Nikkei lost 2.2%, South Korea's Kospi slid 1.1%, China's Shanghai Composite gave back 0.3%, and Hong Kong's Hang Seng added 0.5%.

Conversely, European indexes are headed higher at midday, led by gains in Switzerland after the country's central bank unveiled plans to enforce a minimum exchange rate versus the euro. Elsewhere in the region, Royal Bank of Scotland regained some of the prior session's losses after being named in an FHFA lawsuit late Friday. At last check, London's FTSE 100 is up 0.9%, and the German DAX and French CAC 40 have each added about 0.1%.

Currencies and Commodities

The greenback is trading modestly higher this morning, with the U.S. dollar index up about 0.2%, at last check. Elsewhere, crude oil futures have extended Friday's retreat, with the front-month contract last seen $1.94, or 2.2%, lower at $84.51 per barrel. On the flip side, gold futures have continued their quest for record highs, with the precious metal up $9.30, or 0.5%, to linger near $1,886.20 an ounce.

 


Unusual Put and Call Activity:


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