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Before The Bell: Texas Pain and Happy Meals


Texas Instruments forecasts lower sales and profits. Mickey D's surges.

Morning Perspective: Texas Pain

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!

No positions in stocks mentioned.

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