3 Things to Watch in Today's Market

U.S. markets are slated to give back yesterday's final-hour gains, with futures on the Dow Jones Inudstrial Average (INDEX: ^DJI  ) and S&P 500 (INDEX: ^GSPC  ) indicating a 0.7% fall at the open as of this writing. Let's take a look at a few of the major storylines for this morning.

World markets tumble
International markets are falling this morning, with Asian and European markets broadly lower after digesting poorly received Federal Reserve minutes from yesterday afternoon, along with other overnight data releases. One key overnight development was South Korea's decision to lower interest rates for the first time in more than three years. The cut from Asia's fourth-largest economy comes in conjunction with a lower economic growth forecast of 3.3%, versus prior estimates of 3.7%, as it deals with dampened domestic spending and exports. The move also follows rate cuts in China and Europe last week.

Jobless claims
In the U.S., weekly jobless claims are released at 8:30 a.m. EDT this morning. Expectations are for 370,000 new claims, down 4,000 from last week's report. After rising throughout May, last week's report encouraged investors ahead of the June nonfarm payrolls report. While the June numbers ultimately disappointed, a continued downtrend in claims throughout the month should bode well for July labor data.

25% off at SUPERVALU
After yesterday's market close, grocer SUPERVALU (NYSE: SVU  ) reported quarterly results well below expectations, posting $0.19 in EPS, a full 50% below analyst estimates. But it's not the numbers alone causing this morning's 25% premarket plunge. Burdened by a massive debt load used to acquire Albertsons in 2006, SUPERVALU also announced it would be suspending its dividend and weighing a potential sale. The company reiterated that bankruptcy is not on the table and moved to restructure certain debt obligations by using real-estate assets as collateral, increasing the company's financial flexibility.

In other earnings news, industrial-supplies company Fastenal (Nasdaq: FAST  ) was able to beat analyst expectations by a penny, announcing EPS of $0.38, despite falling a little short of the revenue line. Insurer Progressive (NYSE: PGR  ) also reports earnings this morning, with analysts expecting EPS of $0.27 on $4.1 billion in revenue.

Earnings season strategy
Given the increased volatility that occurs during earnings season, it can be a scary time of the year for even the most stoic long-term investors. That's why we here at The Motley Fool like to buy companies with highly sustainable business models built for the long haul. We outline a few companies fitting that description in our latest special report: "The 3 Dow Stocks Dividend Investors Need." Make sure to claim this report right now, because it won't be around forever. Click here to get your copy.

Brenton Flynn owns no shares in the companies mentioned. The Motley Fool owns shares of SUPERVALU. Motley Fool newsletter services have recommended buying calls on SUPERVALU. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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  • Report this Comment On July 12, 2012, at 10:13 AM, fool3090 wrote:

    Actually, SVU is off more than 43 percent this morning (8:07 am Mountain). Which brings up a good point.

    WEre Fools blind-sided by SuperValu? I never bought into the value/turnaround thesis. Having seen/visited some stores in several locations nationwide, I was far from impressed. The evidence of struggling enterprise were everywhere, from the condition of the stores to the attitude of workers.

    So now, there is no dividend. What is the purposed of owning this dog? And what's with the four-star CAP rating?

    Again, I ask what Fooldom was up to in recommending SVU or even following it.

    Best headline ever: "Supervalu Says It’s For Sale and, All of a Sudden, Someone Finally Reads the 10-K: OMG! WTF!" It's a posting in YCharts. Read it and weep.

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