Futures higher, but the bulls have some work to do to erase last week's losses. Earnings reports will continue to be heavy this week, but traders will be focused on economic data. The first week of the month is always an important one for economic data and this could create some volatility. Monday's calendar includes data on construction spending, the ISM Mfg. Survey and pending home sales. In earnings news, Ford (F), Lowes (L) and Humana (HUM) were a few of the companies reporting this morning.

Ford shares are up nearly 10 percent this morning after the automaker blew past earnings expectations. The company reported its first quarterly profit in nearly two years, although revenues were down slightly from the year ago period. Analysts were looking for a loss of 13-cents a share, but Ford made 26-cents a share. Ford also raised its guidance for fiscal 2011, leaving traders in a buying mood for Ford shares. The stock is trading near $7.65 in early trading, well above the lows shares saw below $2 in March.

Loews and Humana also reported this morning with Loews up more than 2 percent, but HUM declining 1.5 percent. The insurance holding company beat earnings estimates by 19-cents a share at $1.08 with revenues coming in at $3.74 billion, well above expectations for revenues of $3.35 billion. HUM did manage to beat estimates by a penny, but revenues fell short and guidance was mixed. HUM shares are trading near $37 with a 52-week range from $18.57 to $46.01.

Biotech shares are higher this morning following positive clinical trials at Vertex Pharma (VRTX) and Human Genome Sciences (HGSI). HGSI shares are up 35 percent after the company announced positive clinical trial results for its new lupus drug. The stock is trading near $25, which would be a new 52-week high. The stock has a 52-week low of 45-cents reached back in March. VRTX shares are up more than 10 percent to a price above $37 on positive phase II studies for its hepatitis C drug telaprevir.

Stocks are higher in early trading, but this could change if economic news is disappointing. The ISM Mfg. Survey is expected to show a mild rise in October to 53.0 from 52.6 in the prior month. A reading above 50 shows a state of expansion with this index above this key level the past two months. Construction spending for September is expected to show a 0.2 percent decline after rising 0.8 percent in August. Traders would like to see improvements in the year on year figure, which has shown at least 10 percent declines for eight straight months.

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

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