Milwaukee Professionals Association

Schacknow - Today's Brief, August 23, 2012

Peter Schacknow, Senior Producer, CNBC Breaking News Desk

The most recent FOMC minutes are serving to emphasize what U.S. investors are concentrating most on in the short-term – another round of quantitative easing.  The hints that this may occur sooner rather than later helped bring the major averages well off the lows during the Wednesday session, with the S&P 500 and the Nasdaq managing to edge their way into positive territory before the end of the trading day.  That notion is also helping to lift stock index futures higher this morning.

It’s the busiest day of the week for economic reports, beginning with the Labor Department’s weekly look at initial jobless claims at 8:30am Et.  Economists are looking for 365,000 new claims for the week ending August 18, compared to 366,000 the prior week.

At 10am ET, forecasts call for July new home sales to have risen by 2.9% to an annual rate of 360,000, compared with the prior month’s 8.4% drop.  At the same time, the FHFA will release home price data for the month of June and for the second quarter.

At 10:30am ET, the Energy Department is out with its weekly assessment of natural gas inventories.

Retailer Big Lots (BIG) and foodmaker Hormel (HRL) are among the companies set to release earnings this morning, while tech companies Autodesk (ADSK) and Salesforce.com (CRM) are on the after-the-bell release agenda.

Dow component Hewlett-Packard (HPQ) leads our list of stocks to watch.  HP earned $1.00 per share for its third quarter, two cents above estimates.  But revenues were on the light side and its full year EPS forecast of $4.05 - $4.07 per share is partially below or at best equal to consensus forecasts of $4.07.  CEO Meg Whitman says the company is still in the early stages of a multi-year turnaround.

Chipmaker Rambus (RMBS) is cutting about 15% of its workforce as part of a restructuring that will save up to $35 million annually.  The cuts will begin in the next few weeks and will be completed during the fourth quarter.

Guess (GES) has lowered its full year guidance for the second time in three months, with the apparel maker cutting full year forecasts to $2.15 - $2.30 per share.  That’s below consensus estimates of $2.53.  Guess cites continued weakness in Europe and falling sales in North America.

Krispy Kreme Doughnuts (KKD) reported a second quarter profit of $0.12 per share, excluding certain items, well above consensus estimates of $0.05.  It also raised its yearly earnings forecast by one cent, now expecting to earn $0.22 to $0.25 per share.  Krispy Kreme is being helped by a rise in domestic same store sales.

Facebook (FB) could get a boost today after the FTC closed its investigation of the company’s deal to buy Instagram.  The FTC took no action, meaning the $1 billion deal can now proceed as planned.

Nasdaq OMX (NDAQ) is under harsh criticism from Citigroup (C ), which is calling on regulators to reject Nasdaq’s plan to compensate for losses related to Facebook’s IPO.  Citi says Nasdaq was “grossly negligent” in its handling of the offering, and that it should be entitled to recover all losses.  Nasdaq has so far declined comment.

Jurors are continuing their deliberations today in the Apple (AAPL) vs. Samsung patent case.  Experts are not expecting a quick verdict in the extremely complex case, which involved 109 pages of instructions to the jury.

Diageo (DEO) has raised its full year dividend by 8%, with the world’s biggest spirits maker expressing confidence about growth in its African and Asian markets.

Blackstone Group (BX) and market-maker Getco have sold some of their holdings in Knight Capital Group (KCG) to Scottrade, according to Reuters.  The two were among those involved in the recent rescue of Knight Capital after its recent $440 million software glitch-related trading loss.

Micron (MU), SanDisk (SNDK) and other memory chipmakers could be affected by reports that prices for DRAM chips are falling at a faster rate.  Japan’s Nikkei business daily says prices have dropped 9% from their late June highs.