Futures flat as traders digest plethora of earnings reports and a sharp drop in Asian stock prices. On Monday, the Dow (^DJI) experienced its first consecutive triple digit decline since June and this bled to Asian market where the Shanghai Index fell 2.83 percent and the Hang Seng Index decline 1.86 percent. Earnings are the focus this morning with reports from Baidu.com (BIDU), U.S. Steel (X), BP (BP) and TD AmeriTrade (AMTD) a few of the companies reporting already.

Chinese search engine BIDU reported earnings per share of $2.16, which was 35-cents better than anticipated. However, the stock is taking it on the chin this morning thanks to a disappointing outlook. BIDU stated that fourth quarter revenues would be between $174 million and $180 million, well below estimates for revenues above $200 million. BIDU shares are down more than $80, or about 20 percent, to a price near $350. The stock has a 52-week range from $100.50 to $439.90.

Oil prices nearly hit a 52-week high on Monday, only to fall in late in the session below $79 a barrel. The commodity fell on strength in the dollar yesterday and is seeing a mild gain in early trading Tuesday. Oil company BP reported earnings this morning that blew past expectations, although profits were down almost 50 percent. Cost cutting benefited the BP, but analysts were pleased with the results and BP shares are trading at a new 52-week high, up nearly 5 percent to a price above $58.

In economic news, same-store sales for the week ending Oct. 24 rose 0.1 percent with the year on year gain at 2.4 percent as measured by the ICSC-Goldman report. This is the fifth straight gains for this report. The Redbook data showed strength as well, rising 0.7 percent year on year. The strength in the Redbook report has been much smaller since Wal-Mart (WMT) was removed from the calculation.

Home prices in August rose as measured by the S&P Case-Shiller report. This is the third straight month of gains home prices, a sign that the housing sector has begun a recovery. The concern now is the end of the first time home buyer credit program at the end of November. Many economists want to see this program extended to keep the sector from returning to its prior state.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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