Trader Talk

Trader Talk: Sentiment Weak in Germany, Too

Brian A. Shactman |CNBC Reporter

Bob Pisani is off today; this post was written by Brian A. Shactman, CNBC reporter.

Volume looks to be a little light early on today, but the news flow is not.

Overnight, futures were slightly higher until the IFO Business Sentiment Survey came out in Germany. It was worse than expected and indicated possible contraction in the German economy.

In the U.S., Wall Street will focus on Case-Schiller in the housing sector and consumer confidence.

Both Toyota and Greece continue to have a presence, and Toyota's problems head to Washington, DC where the company will have to answer both to Congress and subpoenas -- all related to how the company has handled the safety issues with its cars.

In terms of earnings, a host of retailers have reported:

1) Rising 1 percent pre-open, Home Depot will open at a 52-week high. The home improvement retailer’s Q4 earnings topped expectations ($0.24 vs. $0.17 consensus). Same-store sales still fell 1.2 percent, but that too was better that the Street’s forecast.

With so much attention being paid to dividends these days, Home Depot raised its dividend for the first time since 2006.

Looking ahead, the company sees stronger-than-expected 2010 earnings ($1.79 vs. $1.55 consensus) on a 1.2 percent rise in comps.

2) Target is down 1 percent as Q4 sales missed estimates ($19.7 billion vs. $20.2 billion consensus). That overshadowed better-than-expected earnings, which were boosted by higher margins from better management of inventories and costs.

3) Macy's is up 1 percent after beating the Street by 3 cents. More importantly, the company's cash flow is up to $1.6 billion. In the news release, Chief Executive Terry Lundgren pointed to better margins as a key to the results.

4) Nordstrom falls 4 percent after reporting disappointing results. The main culprits, according to the company, were higher debt expenses due to an increase in credit card delinquencies.

2010 guidance remains cautious, with growth moderating in the second half. Earnings are seen inline with current estimates ($2.35 and $2.55 vs. $2.41 consensus), as comps are expected to grow 2 percent to 4 percent.

5) Shares of RadioShack are 5 percent lower. Q4 earnings topped estimates by a penny, but sales outside of mobile phone equipment were disappointing for the second straight quarter.

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