Morning Report: February 17, 2012

Ahead of the Bell: Dow futures are trading up 39 points and S&P futures are trading up 2 points on strong earnings and economic data out of China along with optimism Greece is edging closer to securing its second round of bailout funds.  According to reports, if a deal is not reached in time for the March 12 deadline, Germany plans to provide a bridge loan for the debt laden nation to repay bond redemption.  The ECB also plans to swap Greek debt for new bonds after the deal is completed.

• On the economic calendar today, consumer price index for January will be out before the market opens. Economists are forecasting 0.3% compared with a flat reading from the previous month.  The Conference Board's index of leading indicators for January will be out after the market opens, and is expected to be 0.5% versus 0.4% for December. 


• Companies reporting earnings include Aegon N.V., Brookfield Asset Mgmt, Campbell Soup, Frontline, H.J. Heinz, Pilgrim's Pride, and PolyOne Corporation. Crude oil is currently trading at $101 a barrel.  Gold is trading at $1,718.   The dollar is down against the major currencies.


• Yesterday, stocks rebounded from two trading sessions of losses, bolstered by investor optimism.  The major indexes surges following better than expected initial jobless claims, housing starts, and manufacturing data.


• On CNBC today, Reid Hoffman, Executive Chairman and Co-Founder of LinkedIn, talked about the rise of social networking and entrepreneurship.  Hoffman said we are at the very beginning of discovering how the internet and social networking companies will transform people’s lives and be great businesses at the same time.  The difference between the first wave of the internet companies and the current wave is that today’s companies are much more stable with good fundamental businesses.  Hoffman says all of the new technology is feeding towards the creation of the next big phenomenon.  He believes there are still opportunities out there for entrepreneurs with good business ideas.  When investing in new companies, Hoffman looks for solid networks and platforms, and most importantly, great ideas.   


• Happy Friday, have a nice day, and enjoy the long weekend

Thursday’s Close

DJIA up 123.13 pts/+0.96%/12,940.08

S&P up 14.82 pts/+1.10/1,358.05

Nasdaq up 44.02 pts/+1.51/2,959.85

Friday’s Futures

Dow Futures up 39.00 pts/+0.30%

S&P Futures up 2.40 pts/+0.21%

Nasdaq Fut up 2.58 pts/+0.08%

Overseas Markets

FTSE +0.30%

CAC 40 +0.94%

NIKKEI 225 +1.58%

HANG SENG +1.01%

Overseas:  World stock markets were up today.  European and Asian markets are up on hopes for a Greek bailout and better than expected economic and earnings data from Asia.      

Economic Reports:  Consumer Price Index expected to be 0.3% at 8:30 a.m. and Leading Indicators expected to be 0.5% at 10:00 a.m.

Top Headlines:    

• Reports indicate Google (GOOG) and other advertising companies have been bypassing the privacy settings of Apple’s iPhone (AAPL) users and tracking web-browsing habits of people.


• 3M Company (MMM) plans to inject about $800 million to $1 billion in cash for 2012 into underfunded employee retirement plan, as falling discount rates inflate long-term liabilities. 


• Carl Icahn is offering to pay $30 a share in cash for CVR Energy Inc. (CVI) giving the company a value of $2.6 billion. The company said its shares are worth at least $37 a share.


• Reports indicate the CME Group Inc. (CME) has made a bid for the London Metal Exchange and the LSE plans a meeting next week to consider the offer..     

Commodities/Currency:

Gold:up $2.10 to $1,731.85
Oil: up 0.41 to $102.72

EUR/USD 1.3139 +0.0005
USD/JPY 79.0900  +0.1900
GBP/USD 1.5828 +0.0023

Volatility Index (VIX): As of the close of business Thursday, February 16, the VIX is down 1.92 at 19.22

Companies Reporting Quarterly Earnings:     

Heinz (HNZ): FQ3 EPS of $0.95 beats by $0.10. Revenue of $2.92B (+7% Y/Y) beats by $30M.

K-Swiss (KSWS): Q4 EPS of -$0.71 misses by $0.29. Revenue of $50.2M (+17.6% Y/Y) beats by $9M.

Capital Lease Funding (LSE): Q4 FFO of $0.15 in-line. Revenue of $38.9M (-4.4% Y/Y) misses by $2M.

Digital Realty Trust (DLR): Q4 FFO of $1.03 beats by $0.02. Revenue of $271M (+13.4% Y/Y) misses by $4M.

Pilgrim's Pride (PPC): Q4 EPS of -$0.40 misses by $0.09. Revenue of $1.83B (+1% Y/Y) misses by $50M.

ENBRIDGE (ENB): Q4 EPS of $0.37 misses by $0.03. Revenue of $5.44B (+31.2% Y/Y) beats by $840M.

Amerigroup Corporation (AGP): Q4 EPS of $0.67 beats by $0.05. Revenue of $1.64B (+9.6% Y/Y) in-line.

Frontline (FRO): Q4 EPS of -$4.41 may not be comparable to consensus of -$0.58.

EnCana (ECA): Q4 EPS of $0.06 may not be comparable to consensus of $0.09.

FreightCar America (RAIL): Q4 EPS of $0.71 beats by $0.58. Revenue of $187.1M (+266.9% Y/Y) beats by $61M.

Today’s Opening and Closing Bells:

Tortoise Pipeline & Energy Fund Inc. Brian Kessens VP and Dave Henriksen Head of Distribution Montage Investment will ring the opening bell.

Towers Watson Visits the New York Stock Exchange CEO John Haley will ring the closing bell.