Milwaukee Professionals Association

Schacknow - Today's Brief, August 22, 2012

TODAYS PRIMER                            
Peter Schacknow, Senior Producer, CNBC Breaking News Desk

U.S. stocks took the proverbial “penthouse to the outhouse” route in Tuesday’s trading — looking like a cinch at midday to close at 4-1/2 year highs, but ending the day with the biggest one-day drop for the major averages since August 2.  Stock index futures do indicate that one of the Street’s least-loved rallies in years could resume at the opening bell.

Investors get their first economic report of the week to consider this morning, as the National Association of Realtors releases existing home sales numbers for July at 10am ET.  Economists think sales rose 3.0% in July following a 5.4% decline in June.  At 2pm ET, the Federal Reserve releases the minutes from the most recent FOMC meeting, which will be parsed for any clues as to the possibility of a third round of quantitative easing by the central bank.

Retailers American Eagle (AEO) and Chico’s FAS (CHS) are among the companies set to release earnings this morning, while Dow component Hewlett-Packard (HPQ) is the most prominent of companies set to release quarterly numbers after today’s closing bell.

Home builder Toll Brothers (TOL) is a stock to watch today, earning $0.36 per share for its fiscal third quarter, doubling Street estimates.  Its revenues also came in above consensus, and its revenue from signed contracts was up 57% from a year earlier.

Dell (DELL) earned $0.50 per share for the second quarter, five cents above estimates, but revenues were short of consensus.  Dell’s fiscal year forecast of $1.70 per share is shy of the $1.90 consensus estimate from analysts, and its third quarter sales projections are also below estimates.  Dell’s forecast is seen as a reflection of the shift from desktop and laptop computers to smartphones and tablet computers.

Intuit (INTU) reported fiscal fourth quarter profit of $0.03 per share, half of the $0.06 that analysts were projecting.  The software maker’s revenues also fell slightly short of forecasts, although the maker of the popular Quicken and TurboTax software packages did raise its quarterly dividend by 13%.   It’s also forecasting first quarter revenue below analyst estimates.

Williams-Sonoma (WSM) earned $0.43 per share for the second quarter, two cents above estimates, with the retailer’s sales also above analyst forecasts.  It sees current quarter earnings of $0.43 - $0.46 per share, compared to estimates of $0.43.

Analog Devices (ADI) matched Street estimates with quarterly profit of $0.56 per share, but the chipmaker’s  fiscal third quarter sales are below analyst estimates, and its projected current quarter profit of $0.54 - $0.60 per share falls largely below the consensus forecast of $0.60.  This comes as a weaker global economy cuts demand for semiconductors.

Fifth Third Bancorp (FITB) says the Federal Reserve is not objecting to its latest capital plan, which includes share buybacks and a possible dividend increase.

Lorillard (LO) is authorizing up to $500 million in share repurchases, with the tobacco company setting no expiration date for the plan.  It completed a $750 million repurchase plan earlier this year.

CVR Energy (CVI) could be under pressure today, as investor Carl Icahn withdraws his $29 per share offer to buy the oil refiner.  He currently controls about 82% of CVR’s outstanding shares.

Jury deliberations are set to begin today in the patent trial pitting Apple (AAPL) against Samsung.  The deliberations come after meetings between the CEOs of the two companies failed to produce a resolution.

BHP Billiton (BHP) is reporting an annual profit drop of nearly 35%.  The world’s biggest miner has been impacted by weaker commodity prices