Hoping to get a better read on the technology space, investors are eagerly awaiting Hewlett-Packard'squarterly earnings results, which will be released after the closing bell Monday.
Twelve days ago, Cisco CEO John Chambers warned of slower revenue growth because key consumers continue to reduce spending. Cisco's dim outlook initially dragged on technology stocks and sent the broader markets lower. Since then, executives from both Microsoft and VMware have suggested that the growth problems reported by Cisco aren't widespread, but limited to the networking-equipment giant alone.
H-P's outlook will provide greater clarity, but the company has had it's fill of problems lately. The stock is down almost 20 percent this year following the departure of Mark Hurd and a bidding war for 3PAR . It seems its new CEO, Leo Apotheker, has become a lightning rod for controversy since assuming the role Nov. 3.
Steve Grasso of Stuart Frankel is bullish on Hewlett-Packard on fundamentals, but joked there's one thing that could send the stock lower.
"We just can't show a picture of Leo any longer on the television when we talk about the performance of Hewlett-Packard because that's the only thing that makes it go down lower," Grasso quipped.
Graso's comments, of course, were likely in jest. But the money manager seemed quite serious when he said people have underestimated HPQ. He expects the company to beat expectations with its earnings report.
Aaron Rakers of Stiefel Nicolaus also expects a beat. He called it an "enterprise story," citing upside drivers with earnings-per-share to come in at $1.29 to $1.31 versus the Street's average estimate of $1.27. Rakers said he would be a buyer of HPQ ahead of earnings.
TYSON SHARES CLIMB
Poultry and meat producer Tyson Foods saw shares climb after beating on earnings due to higher prices and a strong quarter so far.
Kanundrum Capital founder Brian Kelly noted that the company has benefited from locking in lower grain prices before they spiked. It said operational efficiencies would help with climbing costs, but he thinks there's only so much they can do to curb the cost. At some point, he thinks it will catch up with them. Plus, he noted that supply in the global grain market is so tight, it would take just one crop failure to send corn or grain prices even higher. Those concerns have kept him away.
RiverTwice Research's Zachary Karabell agreed with Kelly, adding that he's "not in love" with Tyson's management team.
CASINO STOCKS 'ON FIRE'
Risk taking continued in Las Vegas Sands and Wynn Resorts Monday. The casino stocks have been "on fire" lately, said options trader Pete Najarian. On his latest conference call, Steve Wynn said the convention business is coming back and people again spending money in Vegas, reported Najarian.
GREEN MOUNTAIN COFFEE SHARES SOAR
Shares of Green Mountain Coffee rose sharply Monday after the company said it would restate financial statements back to 2007, relieving investor concern over the SEC investigation. As a result, Bank of America upgraded the stock to 'buy' from 'underperform.'
But Kelly wouldn't buy this stock just yet. With gap ups, he said he typically waits two or three days to see if the gap holds. If it does, would consider buying the stock.
With Green Mountain, in particular, he said the stock is getting a boost because it's had huge short interest—roughly 25 percent of the float was short.
CALL TO THE FLOOR: NCR