Morning Market Update: Friday, March 11, 2011
Opening View: Japan Quake Rattles Futures After Thursday’s Sell-Off
National Semiconductor matches earnings expectations
by Jocelynn Drake (jdrake@sir-inc.com) 3/11/2011 7:49 AM
The Dow Jones Industrial Average (DJIA) plummeted more than 200 points on Thursday, suffering its worst daily drop since August and losing its hold on the 12,000 level for for the first time since Jan. 31. In fact, the Dow, S&P 500 Index (SPX), and Nasdaq Composite (COMP) all breached their respective 50-day moving averages amid Thursday’s sell-off. As a result, traders will be keeping a close eye on these trendlines in today’s session.
Ahead of the bell, stock futures are mixed. The Dow is trading about seven points south of fair value, while the SPX is roughly flat. Traders learned this morning of a massive 8.9 earthquake that has caused numerous fatalities and injuries in Japan, and tsunami warnings have now been issued for nearly 20 countries as a result.
In equities news, National Semiconductor Inc. (NSM) reported last night that it banked a fiscal third-quarter profit of $59.4 million, or 24 cents per share. Revenue came in at $343.9 million. Analysts were expecting a profit of 24 cents per share on revenue of $351.7 million. Looking ahead, NSM projected fourth-quarter revenue of $360 million to $370 million, encompassing the current consensus estimate of $367.7 million.
Meanwhile, Aeropostale Inc. (ARO) announced a fourth-quarter profit of $83.8 million, or 95 cents per share, down from its year-ago earnings of $96.6 million, or 99 cents per share. Wall Street was looking for earnings of 97 cents per share. Revenue rose to $839.3 million from $801.2 million. For the first quarter, Aeropostale said it expects of 35 cents to 38 cents per share, and a full-year profit of $2.20 to $2.40 per share. Analysts are expecting first-quarter earnings of 43 cents per share, and $2.54 per share for the full year.
Earnings Preview
On the earnings front, AnnTaylor Stores (ANN) and Citi Trends (CTRN) are slated to release their quarterly earnings reports.
Economic Calendar
We wrap up the week today with the preliminary Thomson Reuters/University of Michigan consumer sentiment survey for March, along with comments from New York Fed President William Dudley.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,337,541 call contracts traded on Thursday, compared to 992,086 put contracts. The resultant single-session put/call ratio arrived at 0.74, while the 21-day moving average rose to 0.59.
Overseas trading is dismal this morning, as all 10 of the markets that we follow are in the red today. The cumulative average return on the group stands at a loss of 1.14%. In Asia, a massive earthquake shook up Japan, causing devastating damage and casualties across the country. Finally, stocks in China weakened after economic data showed the country’s headline consumer price inflation steadied at 4.9% in the year to February, slightly above economists’ forecasts for a 4.7% rise. In Europe, mixed concerns about violence in Libya and Japan’s massive quake pressured stocks lower.
Currencies and Commodities
The U.S. dollar is roughly flat this morning, as the U.S. Dollar Index was seen higher by only 0.03% at 77.30. Elsewhere, crude futures are headed lower, despite continued tension in the Middle East and North Africa. In electronic trading, the April crude futures contract has fallen $3.10 to $100.82 per barrel. Finally, gold futures have also lost some of their luster. In London, the lead gold futures contract has dropped $5.10 to $1,407.40 an ounce.
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