Morning Report: September 13, 2011

Ahead of the Bell: Dow futures are trading down 53 points and S&P futures are trading down 6 points after optimism faded that China would purchase Italian bonds. Italy would still require a long term solution to solve its debt crisis. Worries over French banks exposure to sovereign debt and a Greek default is weighing on financial markets. German Chancellor, Angela Merkel, said Europe is doing all it can to prevent Greece from a default. If Greece is allowed to exit the Euro zone, it would cause a domino effect in the region.

  • On the economic calendar today, the government will release its August import and export prices which will be out before the market opens. Economist are expecting a 0.9% drop in import prices and a flat reading in export prices. The NFIB small business optimism index will also be out before the market opens. The Treasury Department will release its budget in the afternoon. Economist are forecasting a $132.0 billion deficit compared with a deficit of $129.4 billion in July. Companies reporting earnings include Best Buy, K12 Inc., and Nordion Inc. The dollar is up against the British pound and Japanese yen and down against the euro. Crude oil is currently trading at $89 a barrel.  Gold is trading at $1,809.   
  • Yesterday, stocks were up on volatile trading after a report that Italy is in talks with China to buy some Italian sovereign debt. French banks including BNP Paribas S.A., Societe General, and Credit Argicole S.A were expecting a downgraded by Moody’s Investor Service.
  • On CNBC today, James Tisch, President and CEO of Loews Corporation, talked about how regulation is preventing jobs in America. Tisch said he is not currently hiring and his company has moved a number of rigs out of the Gulf of Mexico after the BP oil spill. Tisch estimates about 700 U.S. jobs have been lost to Angola, Vietnam, and Europe as a result of the rigs moving offshore. Tisch pointed out workers who were fabricating the platforms to build rigs to drill, have lost their jobs too.  He blames the Interior Department for the slow granting of permits to drill, companies can’t put together rigs without permits to drill. Tisch went on to say the Interior Department has shut down everything including the jack up rigs.  Finally, Tisch said business people he speaks to, say their business is o.k., but they are worried about the future over regulation and politics. Tisch feels that if we had a little bit of optimism, and stop the bickering in Washington, it would improve business confidence.     
  • Happy Tuesday, have a nice day.

Monday’s Close

DJIA up 68.99 pts/+0.63%/11,061.12

S&P up 8.04 pts/+0.70/1,162.27

Nasdaq up 27.10 pts/+1.10/2,495.09

Tuesday’s Futures

Dow Futures down 53.00 pts/-0.55%

S&P Futures down 6.30 pts/-0.54%

Nasdaq Fut down 8.58 pts/-0.39%

Overseas Markets

FTSE -0.29%

CAC 40 -1.04%

NIKKEI 225 +0.95%

HANG SENG -4.21%

Overseas:  World stock markets were down today.  European and Asian markets are down on the Euro zone sovereign debt crisis.      

Economic Reports:  Import and Export Prices expected be -0.9% at 8:30 a.m. and Treasury Budget expected to be $-132.0B at 2:00 p.m.

Top Headlines:    

  • Hewlett-Packard (HPQ) announced it is extending its $11.2 billion takeover offer for British software company Autonomy to October 3.
  • A unit of the Bank of New York Mellon (BK) unit is being sued in federal court in New York by Detroit pension funds over losses on investments in Lehman Brothers Holdings Inc.
  • Standard Pacific Corp. (SPF) announced CEO, Ken Campbell will step down on January 1, 2012.  Scott Stowell, President, will  assume day-to-day management of the Company. He will receive the title of CEO and will join the BOD upon Campbell's departure in January. 
  • Sara Lee (SLE) announced CJ Fraleigh, CEO of NA, has resigned from the company to pursue other opportunities. Sara Lee CEO Marcel Smits will also assume responsibilities for the NA business.    

Commodities/Currency:

Gold:down $5.10 to $1,809.85

Oil:up $0.99 to $89.18

EUR/USD 1.3668 +0.0007

USD/JPY 76.9650  -0.1500

GBP/USD 1.5817 -0.0042

Volatility Index (VIX): As of the close of business Monday, September 12, the VIX is up 0.07 at 38.59

Companies Reporting Quarterly Earnings:     None as of yet.

Today’s Opening and Closing Bells:

Magnum Hunter Resources Visits the New York Stock Exchange Chairman and CEO Gary C. Evans will ring the opening bell.

The Receivables Exchange will ring the closing bell.