Before The Bell: Texas Pain and Happy Meals
Texas Instruments forecasts lower sales and profits. Mickey D's surges.
Tech stocks are under pressure this morning after Texas Instruments (TXN) cut its sales and profit forecasts due to slowing demand. A company executive from TXN, the world's second largest maker of mobile phone chips, said the lowered forecast was the result of "weaker-than-expected demand from wireless" and that it was too early to say if this was a result of an economic slowdown. According to Bloomberg the company said 1Q earnings will be in the range of $0.41- 0.45 per share on revenues of $3.35-3.27 bln. Analysts had expected EPS of $0.46 on $3.4 bln revs. Shares of TXN fell 3.5% in overseas trading. Read Professor Quint Tatro's column Bounce Back From Bad Trades.
From the Bull Pen: Bulls see an opportunity in TXN with multiyear support at $28. Entry near that level with sell-stops set below.
From the Bear Cave: Bears are expecting the news to hit the mobile phone makers. Downside plays may include Research In Motion (RIMM) and Nokia (NOK); buy-stops above $100 and $34 respectively.
Happy Meals To You
Shares of McDonald's (MCD) surged almost 3% yesterday. According to Bloomberg, the world's largest restaurant company said February same store sales exceeded analyst expectations due in part to increased demand in Europe and China. Same-store-sales jumped 12% globally with Europe coming in at +15%, its largest region by revenue. In the U.S. sales at stores open for more than 13 months increased 8.3% vs. analyst expectations of +7.3%. The figures are a stark contrast to its recent performance as revenues were unchanged for December and same store sales rose just 1.9% in January. For context on the consumer, read Professor Jeff Macke's Ugly February For Retail.
From the Bull Pen: Professor Macke likes MCD. Bulls can place near-term sell-stops below recent lows ($52). Another option may be Burger King (BKC); sell-stops below $25.60.
From the Bear Cave: Technically, bears see an opportunity for a downside play in MCD as the stock rallies right into resistance ($55); buy-stops can be set above.
For more ideas, see Minyanville's Spotlight Stocks.
Quick Check Around the World
Asian trading closed with the Hang Seng +1.28%, Nikkei +1.01%, Sensex +1.06%, Taiwan +0.99% and Shanghai +0.47%.
A quick look towards Europe finds the CAC +0.2.11%, DAX +1.13%, FTSE +1.75%.
As of 8:30 AM EST, S&P futures are higher +19.40 to 1294, and Nasdaq futures are up +16 points to 1693.
A Look At Commodities
Commodities are higher. Crude is up +1.66 to 109.56. Gold is higher +12.60 to 984.40. Silver is up +0.092 to 19.790 and copper is lower -2.35 to 378.50.
The dollar index is lower -0.365 to 72.628.
On the Radar
Trade Balance: -$58.2 bln vs. -$59.5 bln cons
10:00 IBD/TIPP Economic Optimism: 42.0 cons
5:00 ABC Consumer Confidence
Click here for the full trading radar.
Turnaround Tuesday it is! Good luck!
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