Morning Report: November 16, 2011

Ahead of the Bell: Dow futures are trading down 70 points and S&P futures are trading down 8 points following the previous trading sessions modest gains. The focus will be on Dell, after the company reported lower than expected 3rd quarter earnings, and said full year results could be hurt by an industry-wide shortage of hard drives. Europe will also be in focus, as ECB officials continue to reject calls from the international community to halt the spreading of a sovereign debt crisis in the region. Italy is expected to unveil its new government today.

  • On the economic calendar today, Consumer price index for September will be out before the market opens, and is expected to be flat compared with a reading of 0.3% for September. Industrial production for October will also be out before the market opens and is expected to be 0.4% versus a reading of 0.2% for September. Richmond Federal Reserve Bank President, Jeffrey Lacker will be on panel discussing the Fed and allocation of credit, at the Cato Institute annual conference in Washington. Boston Federal Reserve Bank President, Eric Rosengren will be speaking to the Boston Economic Club. Companies reporting earnings include Abercrombie & Fitch, Salesforce.com, Spectrum Brands, Target, Tyco Intl, and Limited Brands. The dollar is up against the major currencies. Crude oil is currently trading at $99 a barrel.  Gold is trading at $1,774.  
  • Yesterday, stocks were higher on better than expected economic data from retail sales and manufacturing, however investors remained worried about Europe's debt crisis.
  • A New York State court has ruled that Occupy Wall Street protestors may return to Zuccotti Park to protest but will no longer be allowed to camp out in the park.
  • On CNBC today, T. Boone Pickens, BP Capital Management, talked about alternative energy and the delay of the Keystone pipeline from Canada. Pickens said America is lacking a energy policy.  We haven’t had one for the last 40 years, but we need to plan now for the next 30-35 years and if we begin to develop our natural gas and crude oil reserves we will be able to compete with the Middle East in the future. Pickens thinks we have the cheapest energy in the world, including natural gas, and crude oil, and he can’t believe we are not moving faster to develop it. On the delay of the Keystone pipeline from Canada, he believes there has been an lack of leadership out of Washington and President Barack Obama is being highly influenced by the environmentalists. Pickens said he does not agree with the decision to delay the pipeline, as Canada will sell the oil to China, and leave the US behind.    
  • Happy Wednesday, have a nice day.  

Tuesday’s Close

DJIA up 17.18 pts/+0.14%/12,096.16

S&P up 6.03 pts/+0.48/1,257.81

Nasdaq up 28.98 pts/+1.09/2,686.20

Wednesday’s Futures

Dow Futures down 70.00 pts/-0.31%

S&P Futures down 8.50 pts/-0.52%

Nasdaq Fut down 2.58 pts/-0.11%

Overseas Markets

FTSE -0.51%

CAC 40 +0.16%

NIKKEI 225 -0.92%

HANG SENG -2.00%

Overseas:  World stock markets were down today. European markets and Asian markets were down after EU officials refuse to adhere to calls from the international community to resolve the debt crisis.      

Economic Reports:  Consumer Price Index expected to be flat at 8:30 a.m. and Industrial Production expected to be 0.4% at 9:15 a.m.

Top Headlines:    

  • Peabody Energy Corp., (BTU) said it has acquired about 90% of Australia's Macarthur Coal which sets the stage for the company to affect a compulsory acquisition.   
  • UBS AG (UBS) announced it has named interim CEO Sergio Ermotti as its permanent CEO following the trading scandal that forced the resignation of Oswald Grübel.
  • Reports indicate Citigroup Inc., ( C ) plans to cut about 900 jobs from its banking and securities division as it copes with lower volume.
  • Apple Inc. (AAPL) said it has named long-time board member Art Levinson as non-executive chairman of the board.  Disney’s CEO Bob Iger  has also joins the board of the company.
  • CNBC reports Google Inc. (GOOG) is set to debut it new music software today to compete with Apple’s iTunes.     

Commodities/Currency:

Gold:down $6.10 to $1,774.85

Oil:down 0.37 to $99.79

EUR/USD 1.3460 -0.0100

USD/JPY 76.9550  -0.0700

GBP/USD 1.5774 -0.0039

Volatility Index (VIX): As of the close of business Tuesday, November 15, the VIX is down 0.09 at 31.22

Companies Reporting Quarterly Earnings:     

Tyco International (TYC): FQ4 EPS of $0.92 beats by $0.06. Revenue of $4.7B (+4.4% Y/Y) beats by $200M.

Target (TGT): Q3 EPS of $0.84 beats by $0.08. Revenue of $16.0B (+5.4% Y/Y) misses by $270M.

Sally Beauty (SBH): Q3 EPS of $0.29 beats by $0.01. Revenue of $837M (+12% Y/Y) beats by $10M.

Abercrombie & Fitch (ANF): Q3 EPS of $0.57 misses by $0.15. Revenue of $1.07B (+21.5% Y/Y) in-line.

Today’s Opening and Closing Bells:

Xylem Inc. Celebrates Successful Spin-off from ITT Corporation Xylem Inc. President & CEO Gretchen McClain will ring the opening bell.

Triangle Petroleum Visits the New York Stock Exchange CEO Dr. Peter Hill will ring the closing bell.