U.S. stock futures are trading mixed this morning, pointing toward a somewhat positive open, despite weakness on the Nasdaq due to poorly received earnings from Hewlett-Packard (HPQ). The leading PC and computer peripherals manufacturer reported a 13% plunge in first-quarter earnings after the close last night. Other companies in focus this morning include Whole Foods market (WFMI), which is 16% higher ahead of the open following solid quarterly results, and Sprint Nextel (S), which gained about 3% in pre-market activity due to a narrowed quarterly loss. Wall Street's mood could shift dramatically, however, as key economic data, including the January producer price index (PPI), are slated for release later this morning.

Checking in on currencies and commodities, the U.S. Dollar Index is taking a breather following a strong rally earlier this week. At last check, the index was off 0.92% at 87.19 in pre-market activity. Gold futures, meanwhile, have gained a mere $2.40 an ounce to trade at $980.60 in London, with traders closely watching the equity markets for signs of strength. Finally, crude oil futures are on the mend, with the March contract up 3.32% at $35.77 per barrel in electronic trading.

After the close last night, Hewlett-Packard (HPQ: sentiment, chart, options) reported a fiscal first-quarter profit of $1.9 billion, or 75 cents per share, compared with a profit of $2.1 billion, or 80 cents per share, last year. Revenue rose 1% to $28.8 billion from $28.5 billion. Excluding 1-time items, HPQ earned 93 cents per share. Analysts were looking for earnings of 93 cents per share on $31.9 billion in sales. For its second quarter, the company expects earnings of 70 cents to 72 cents per share, or an adjusted 84 cents to 86 cents per share. Sales should fall 2% to 3% from a year earlier, which would equal $27.5 billion to $27.7 billion. The figures were well below the current consensus estimate for 89 cents per share on $30.95 billion in sales.

Whole Foods Market (WFMI: sentiment, chart, options) reported that net income fell 17% from the year-earlier quarter due to slowing store traffic and legal costs. Whole Foods posted a first-quarter profit of $32.3 million, or 20 cents per share, down from $39.1 million, or 28 cents per share, last year. However, earnings topped analyst expectations for 19 cents per share. Sales were flat at $2.5 billion. Comparable-store sales fell 4% compared with a 9% gain last year.

Finally, Sprint Nextel (S: sentiment, chart, options) said it lost $1.62 billion, or 57 cents per share, narrowing its loss from the same quarter last year of $29.31 billion, or $10.31 per share. Revenue for the quarter was $8.43 billion, compared to $9.85 billion. Analysts had expected sales of $8.55 billion. "In tough economic times, we're generating substantial cash and reducing costs to ensure we remain financially sound. We already have the cash on hand to be able to meet our debt service requirements at least through the end of 2010," said Dan Hesse, Sprint Nextel chief executive.

Earnings Preview

Today, Apache (APA), CVS Caremark (CVS), Newmont Mining (NEM), and Crocs (CROX) are slated to step into the earnings confessional. Keep your browser at SchaeffersResearch.com throughout the day for more.

Economic Calendar

On the economic front, the Street must digest the January producer price index (PPI), the core PPI, January's leading economic indicators, the February Philadelphia Fed's manufacturing index, and the weekly reports on U.S. petroleum supplies and jobless claims. We round out the week on Friday with the consumer price index (CPI) and the core CPI.

Market Statistics

Equity option activity on the CBOE saw 1,251,244 call contracts traded on Wednesday, compared to 1,098,962 put contracts. The resultant single-session put/call ratio slipped to 0.88, while the 21-day moving average held at 0.75.

**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**

Company of the Year: Nasdaq

Under CEO Bob Greifeld, NASDAQ OMX plays the stock trading game better than anybody.

The market has been open less than two hours and already 900 million or so shares worth $25 billion have changed hands. In a given second the total jumps by $3 million to $5 million--all without a sound. Unlike the New York Stock Exchange a few blocks away, this exchange has no shouting traders, no crumpled trade tickets on the floor. At the Nasdaq OMX Group, a single technician sits in front of eight flat-panel computer screens in a quiet operations center, 51 stories above the World Trade Center construction site. On one screen, quotes blink on and off at speeds barely visible to the human eye. On another, a fever chart showing orders and completed trades scrolls along like the electroencephalogram of an agitated 2-year-old.

To the extent that the Nasdaq market exists anywhere, it's within a single rack-mounted Dell server in a rented data center somewhere across the Hudson River. That machine routinely processes 70,000 orders, cancelations and trades per second but can handle up to 250,000 per second--enough to deal with trades on the Nasdaq plus the London and Paris stock exchanges with room to spare.

An entire trading floor crammed into a suitcase-size computer: That's the future of exchanges, and Nasdaq was there first, having been all-electronic--floorless, that is--since its inception in 1971. In the early days the trades were by telephone; since 1983 they have consisted of computer clicks.

With roughly 33% of the total volume in U.S. equities, and 2,500 employees, Nasdaq OMX is rushing to push more stock trades as well as futures, options and other derivatives onto its superfast, supercheap servers before competitors like NYSE Euronext catch up. "As you add scale, your incremental cost goes to zero," says Robert Greifeld, 51, a former computer salesman who took over at Nasdaq in 2003 as it was being spun out of the old National Association of Securities Dealers, now the Financial Industry Regulatory Authority. "Our goal is to add more incremental trades at zero cost."

In a year of spectacular market meltdowns, Nasdaq OMX Group has capitalized on the turmoil. It is our Company of the Year.

The chaos in financial markets--to say nothing of exploding volatility--has been a windfall for exchange operators. Combined U.S. trading volume on all exchanges averages 10.6 billion shares a day, compared with 4.2 billion two years ago and 1.5 billion a decade ago. The recent increase in volume is accompanied by an explosion in volatility: The CBOE Nasdaq Volatility Index, reflecting short-term expectations of volatility in the Nasdaq 100 Index, surged to 80 from 20 or so between mid-2006 and October of last year. At four-hundredths of a penny per share, Nasdaq takes in $800,000 in fees on a 2-billion-share day, just for pushing electrons through its servers.

But there's more competition for that traffic. A 2007 federal regulation ordered brokers to route their trades to the cheapest exchange, not the one that is most convenient. In Kansas City, Mo., Bats Exchange, a three-year-old competitor, now handles approximately 12% of U.S. volume, including 12% of the trading in Nasdaq-listed shares.

Traders are also doing 7% of their volume in "dark pools," the electronic equivalent of a back alley where buyers and sellers transact anonymously, according to Tabb Group, a Westborough, Mass. market researcher. "People used to talk about each stock having a principal exchange," says Daniel Mathisson, managing director in charge of a Credit Suisse division that uses computers to direct trades to the lowest-cost exchange at any given moment. "Now the trading's going all over the place, and there is nothing to stop that trend."

So Greifeld plays offense, using cheap technology to get business. In 2005 he paid $935 million for Instinet Group, one of the largest electronic exchange operators, chiefly to get his hands on the Island trading engine, particularly fast and inexpensive technology developed by a young Brooklyn, N.Y. entrepreneur in the mid-1990s. Within months Greifeld scrapped Nasdaq's expensive Tandem computers in a Connecticut data center and moved Nasdaq to off-the-shelf servers. "We have to have the same cost structure as the startups--we can't give any quarter," he says.