The Dow Jones Industrial Average (DJIA) soared to its third consecutive 100-point rally on Monday - a feat last accomplished on Jan. 2, 2009, and one that the DJIA has completed only eight times since 1997. During this three-day bullish binge, the Dow has added roughly 4%, while the CBOE Market Volatility Index (VIX) has plunged some 11.4%. The blue-chip barometer is currently perched above potential support near 10,500, with resistance looming overhead near 10,600 (site of the Dow's June 21 high). Incidentally, the VIX is trading at a two-month low, below its 200-day moving average. The S&P 500 Index (SPX), meanwhile, is perched above its 200-day moving average for the first time since June 21, as the broad-market index looks to leave the dregs of July in the rear-view mirror. While the SPX has potential support at its 200-day moving average and the 1,100 level, the index must still overcome its June high near 1,130. Heading into the open, Wall Street has a bullish bias ahead of a handful of key economic reports. Futures on the DJIA and the SPX are trading 34 points and 2.6 points above fair value, respectively. Can the Dow make it four in a row?
In earnings news, Du Pont (DD) reported second-quarter net income of $1.16 billion, or $1.26 per share. Excluding items, DD earned $1.17 per share, blowing past analyst expectations for earnings of 93 cents per share. Net sales climbed to $8.6 billion. "We grew sales across every segment," said CEO Ellen Kullman. The company lifted its full-year earnings outlook to a range of $2.90 to $3.05 per share, excluding significant items, from its previous range of $2.50 to $2.70 per share.
Elsewhere, BP plc (BP) reported a $17.2 billion loss in the second quarter, as it booked $32.2 billion in charges linked to the Gulf oil spill. BP also named Robert Dudley as its new chief executive, replacing Tony Hayward.
Finally, Office Depot Inc. (ODP) said that its second-quarter net loss narrowed to $18.7 million, or 7 cents per share. Excluding one-time costs related to restructuring, ODP earned 2 cents per share. Sales fell to $2.7 billion, from $2.8 billion. Wall Street analysts expected a loss of 17 cents per share on revenue of $2.75 billion.
Earnings Preview
On the earnings front, AK Steel Holding Corp. (AKS), CIT Group Inc. (CIT), Cummins Inc. (CMI), Domino's Pizza Inc. (DPZ), L-3 Communications Holdings Inc. (LLL), LCA-Vision Inc. (LCAV), Lexmark International Inc. (LXK), Lockheed Martin Corp. (LMT), United States Steel Corp. (X), Teva Pharmaceutical Industries Ltd. (TEVA), Under Armour Inc. (UA), Valero Energy Corp. (VLO), Aetna Inc. (AET), AFLAC Inc. (AFL), Broadcom Corp. (BRCM), Buffalo Wild Wings (BWLD), CB Richard Ellis Group Inc. (CBG) Cephalon Inc. (CEPH), DreamWorks Animation SKG Inc. (DWA), Fiserv Inc. (FISV), Massey Energy Co. (MEE) and Panera Bread Co. (PNRA) are scheduled to release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
Economic Calendar
On the economic front, we'll get the Case-Shiller home price index for May and the Conference Board's Consumer Confidence Index for July this morning, while Wednesday offers up the weekly report on U.S. petroleum supplies. On Thursday, we'll see reports on weekly initial jobless claims and the Fed's Beige Book. On Friday, we'll get the latest numbers on second-quarter gross domestic product, along with the Chicago Purchasing Managers' Index for July, and a final look at July consumer confidence as measured by Reuters and the University of Michigan.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,095,255 call contracts traded on Monday, compared to 608,484 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average slipped to 0.62.
**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.**
Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.
Overseas Trading
Overseas trading has a bullish bias this morning, as seven of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.46%. In Asian trading, regional indexes finished mixed, as investors locked in profits from a solid winning streak. Hong Kong's Hang Seng, in particular, extended its uptrend to six sessions in a row. In Japan, the country's big three banks led the region's modest gains after the Basel Committee on Banking Supervision agreed to broaden the rules regarding core capital requirements at banks. In Europe, the financial sector is leading a broad rally across the region after UBS and Deutsche Bank reported better-than-expected quarterly profits.
Currencies and Commodities
There isn't much activity in dollar and commodities traders this morning, as many investors are in a holding pattern ahead of data on home prices and consumer confidence. The U.S. Dollar Index is hovering just above support at the 82 level heading into the open. The index has not closed a session below this level since April 30. Meanwhile, crude futures are hovering just above $79 per barrel, up 8 cents in pre-market trading. Oil prices have once again rallied into resistance in the $79-$80 per-barrel range, and could be poised to roll over from a double-top formation. Finally, gold futures have added 10 cents to trade at $1,187.10 in London. The malleable metal has lacked the buying strength to reclaim the psychologically important $1,200 level, with the region now providing stiff overhead resistance on a short-term basis.
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations.
Discuss this article:
Post your own comment
More articles:
The Dow Jones Industrial Average (DJIA) cheered a decline in weekly jobless claims and overlooked a need to raise capital among European banks on Thursday, allowing the blue-chip barometer to challenge resistance at its 200-day moving average. While the Dow was unable to make that final push and close above this key trendline, Wall Street appears ready to make a second attempt this morning, as futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 17 points and 3.8 points above fair value, respectively. The positive bias comes even as President Obama prepares to give an 11 a.m. news conference, where traders will scrutinize any comments on the state of the economy. While the DJIA is currently challenging resistance in the 10,450 region, traders should keep an eye out for support in the 10,350 area, should things go south. Similarly, the SPX's levels to watch include support near 1,100 and resistance at 1,110. read more...
The Dow Jones Industrial Average (DJIA) added 46 points yesterday, as market bulls held on to early gains despite lackluster indications from the Fed's Beige Book. The blue-chip barometer appears content to remain between support in the 10,350 region and resistance at the 10,450 level. However, Wall Street must still contend with weekly initial jobless claims, as well as any additional details out of the Obama administration regarding the proposed tax reform and business initiatives the president outlined in yesterday's speech. Overall, however, traders appear to be upbeat, as futures on the DJIA and SPX are trading roughly 45 points and 4.8 points above fair value, respectively. read more...
The Dow Jones Industrial Average (DJIA) gave up 107 points on Tuesday, slipping below former support at the 10,350 level as renewed concerns about European debt levels scuttled any hope of extending the prior week's rally. This morning, however, those fears have cooled following a successful Portuguese debt auction. With the Fed's Beige Book set to hit the Street later today, optimism is creeping back into the market, as futures on the DJIA and the S&P 500 Index (SPX) are trading 43 points and 3 points above fair value, respectively. The Dow could reclaim support at the 10,350 level in early trading, but resistance still looms overhead in the 10,450 area, which is home to the blue-chip barometer's 200-day moving average. As for the SPX, support lies in the 1,090 area, but yesterday's decline has placed the broad-market index back below resistance in the 1,100 region. read more...
The Dow Jones Industrial Average (DJIA) soared more than 128 points on Friday, as Wall Street cheered a round of stronger-than-expected economic data, including the addition of 67,000 new private sector jobs. However, the Dow was unable to overtake resistance in the 10,450 region, which is home to its 200-day moving average. This overhead resistance, combined with pressure on overseas banks and a drop in Germany's manufacturing orders in July, is having a negative impact on pre-market trading. Specifically, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 54 points and 8 points below fair value, respectively. Look for support to materialize near 10,350 for the Dow, while the SPX may find a short-term floor in the 1,095 region. Finally, the CBOE Market Volatility Index (VIX) closed Friday at its lowest level since May 3. While the VIX may benefit from weakness in the equities market today, look for the index to meet with resistance near the 23.50 region, which is home to its 200-day moving average. read more...
Futures on the Dow Jones Industrial Average (DJIA) are trading flat with fair value this morning, as Wall Street holds its breath ahead of this morning's August nonfarm payrolls and unemployment rate. S&P 500 Index (SPX) futures are also indicating no change ahead of the report. Economists are expecting a decline of 105,000 jobs, with a net increase of 30,000 private-sector jobs. The unemployment rate is seen rising to 9.6%. Both the DJIA and the SPX come into today trading above their respective 50-day moving averages. Additionally, the Dow is facing support at 10,150 and resistance at 10,450, while the SPX should find a floor near 1,080 and a ceiling near 1,100. Finally, the CBOE Market Volatility Index (VIX) closed below its 200-day moving average on Thursday. VIX watchers should keep an eye on this trendline, as well as resistance near the 28-29 level, should today's economic data disappoint. read more...
The Dow Jones Industrial Average (DJIA) soared 255 points on Wednesday, logging its best day since July 7 as hopes for a global economic recovery rose. Wall Street is carrying that positive bias over into the open this morning, even as traders prepare for the next wave of U.S. employment data and a look at July factory orders and new home sales. Ahead of these reports, futures on the DJIA and the S&P 500 Index (SPX) are trading 25 points and 2 points above fair value, respectively. The Dow comes into today trading back above support in the 10,250 region and its 50-day moving average. More stalwart support lies in the 10,150-10,100 region, while resistance could materialize near 10,350. As for the SPX, the index is currently capped by its 20-day and 50-day moving averages, with additional resistance in the 1,085 region. Support, meanwhile, lies in the 1,070 region. read more...
The Dow Jones Industrial Average (DJIA) closed out its worst August since 2001 with a huff on Tuesday, as traders appeared reluctant to take a firm stand ahead of this week's employment data. For the month, the DJIA plunged 4.3%, while the S&P 500 Index (SPX) dropped 4.7% in August. However, bolstered by stronger-than-expected economic data out of China and Australia, Wall Street appears ready to turn over a new leaf this morning, as futures on the DJIA and the SPX are trading roughly 91 points and 12 points above fair value, respectively. Keep in mind that the ADP private sector employment report is slated for release later this morning, so be prepared for Wall Street's reaction to the news. Checking the levels, the DJIA has support at 10,000 and 9,950, while resistance lingers overhead in the 10,100 area. As for the SPX, support resides at 1,040, while resistance appears to be growing in the 1,060 region. read more...
The Dow Jones Industrial Average (DJIA) plunged 141 points on Monday, as traders continue to fret over the loss of momentum in the economic recovery. With several key reports on tap today, including the minutes from the most recent Federal Open Market Committee meeting, Monday's late-session sell-off has plenty of fuel heading into the open. In fact, futures on the DJIA and S&P 500 Index (SPX) are trading about 65 points and 7.8 points below fair value, respectively. With the Dow perched just above 10,000 heading into the open, it is likely that we will see this psychological level breached in early trading. What's more, the SPX appears poised to open near its lowest levels since July 7. Support for the DJIA could materialize near 9,950, while 1,035 is the next potential floor for the SPX should 1,040 fall. Finally, the CBOE Market Volatility Index (VIX) could be poised for a breakout above the 28-29 region - an area that has held the index in check since July 6. read more...
The Dow Jones Industrial Average (DJIA) soared more than 165 points on Friday, as Fed chair Ben Bernanke reassured Wall Street that the nation's central bank is far from impotent and, in fact, is ready to step in where needed to support the economy. The reassurance wasn't enough to push the Dow positive for the week, but it did push the blue-chip barometer back above support in the 10,100 region. However, the S&P 500 Index (SPX) failed to retake the 1,065 region, which could provide a bit of resistance early this week. Heading into the open, futures on the DJIA and the SPX are trading relatively flat compared to fair value, as stocks bounce from earlier lows due to a raft of merger and acquisition activity, including deals between Intel Corp. (INTC) and Infineon Technologies AG (IFNNY), and 3M Company (MMM) and Cogent Inc. (COGT). Looking ahead, traders should expect quite a bit of volatility, though any actual directional movement may be limited, as three days of U.S. jobs data will kick off on Wednesday, with the ADP's private sector jobs report, and end on Friday with August's nonfarm payrolls report. read more...
The Dow Jones Industrial Average (DJIA) closed below the 10,000 level yesterday for the first time since July 6, as a late-session sell-off finally overwhelmed the blue-chip barometer. However, with second-quarter gross domestic product (GDP) and a speech from Federal Reserve Chairman Ben Bernanke on tap later today, the situation could change rather quickly. In fact, optimism appears to be creeping onto Wall Street, as futures on the DJIA and the S&P 500 Index (SPX) are trading 25 points and 3 points above fair value, respectively. For support, watch the 9,950 and 9,800 levels for the Dow, and the 1,040 and 1,035 areas for the SPX. On the upside, 10,100 could be a major sticking point for the DJIA, while 1,060 remains a short-term ceiling for the SPX. Finally, keep a close eye on the 28-29 region for the CBOE Market Volatility Index (VIX), as a breakout above this region could mean a continued march higher for market volatility. read more...
working... 
