Investors will be closely watching Capitol Hill for signs of an expected financial package. Treasury Secretary Tim Geithner is expected to disclose the administration's plans to address still-ailing financial institutions. The creation of a "bad bank" to warehouse bad loans is widely expected. Anticipation for a financial package sent stocks soaring on Friday despite a disappointing unemployment report. This week earnings will continue as investors hear results from Beazer Homes (BZH), SOHU.com (SOHU) and UBS (UBS), just to name a few.
NVIDIA Corp. (NVDA) is set to report its fourth-quarter results after the bell on Tuesday, and analysts polled by Thomson Financial are expecting the company to report a loss of ten cents per share on revenue of $487.2 million. Shares of NVDIA recently saw a huge surge in short interest, according to Nasdaq. The exchange said short interest rose 67% January 15 compared with December 31 in the stock. So, investors are betting shares will see a steep decline in the coming weeks.
Nvidia slightly favors a narrowing pattern between its after-hours move and the next day session following an evening earnings event. However, in the near-term performance, the stock is showing a tendency to widen its move, doing so in three out of the past four quarters. On November 6, the stock rallied 13.5% in extended hours after the company's third-quarter results beat the Street. The stock widened its gain in the following regular session, ending up 14.4%.
Applied Materials (AMAT) is due with its fiscal first-quarter results after the close on Tuesday, and analysts polled by Thomson Financial are expecting the company to report a profit of a penny a share, down 96% from a year ago, on revenue of $1.4 billion. However, the biggest supplier of semiconductor manufacturing equipment recently warned of a loss of 9 to 11 cents per share, after expecting in November earnings of zero to 4 cents a share. The stock has found support above $9 per share, as it hasn't closed below that level in the past two months.
The stock has a tendency to narrow its after-hours movement the next day following an evening earnings event. It has done so after 11 of the last 19 earnings events. The near-term performance is mixed, however, with two narrower moves and two wider moves in the last four quarters. On November 12, shares of Applied Materials fell 1.4% after the company warned that profit would fall short in the upcoming quarter. However, shares reversed course in the following trading session, ending sharply higher by 14.3%.
