Wall Street is set to start the week on a sour note, with
futures on all three major market indexes swimming in red ink. The
13,000 mark could be in play, with the
Dow Jones Industrial Average (DJI)
staring down a hefty 75-point deficit. The broad-market barometer
hasn't breached this level on a daily closing basis since April 23.
- Senior Technical Strategist Ryan Detrick points out a
variety of indicators
to eye in this historically bearish season.
- Senior Options Strategist Tony Venosa highlights two key
technical levels to watch on the
S&P 500 Index (
SPX
)
.
Among equities in focus,
Cognizant Technology Solutions (CTSH )
is bracing for a post-earnings plunge; analysts were all for
Avis Budget Group, Inc. (CAR )
ahead of earnings; and,
Tyson Foods (TSN )
shorts jumped ship in the weeks leading up to this morning's
announcement.
And now, on to the numbers...
Market Statistics
Equity option activity on the Chicago Board Options Exchange (
CBOE
) saw 1,241,729 call contracts traded on Friday, compared to
890,300 put contracts. The resultant single-session put/call ratio
arrived at 0.72, while the 21-day moving average was 0.64.
From the Trading Floor
"The
SPX
broke down through minor support at the 1,393-1,394 area after a
worse-than-expected employment report was announced Friday morning.
A couple of important levels to keep an eye on for possible SPX
support are its ascending
80-day moving average
, which is currently located at 1,365, as well as the
April double bottom
in the 1,360 vicinity," explained Senior Options Strategist Tony
Venosa. "In addition, the markets will have to digest weekend news
concerning the election results in France and Greece this
morning."
Currencies and Commodities
- The
U.S. dollar index
is up this morning, with the greenback last seen 0.2% higher at
$79.68.
-
Crude oil
continues to retreat further from the
century mark
, with crude for June delivery down 0.7% at $97.77 per
barrel.
-
Gold futures
are down, as well, with the malleable metal 0.2% lower at
$1,641.90 an ounce.
In earnings news,
Cognizant Technology Solutions Corporation (CTSH -
69.66)
said its first-quarter profit improved 17% on a year-over-year
basis to $243.7 million, or 79 cents per share. Excluding items,
earnings landed at 86 cents per share. Revenue was also on the
rise, jumping 25% to $1.71 billion. By comparison, analysts
forecast adjusted earnings of 79 cents per share on in-line
revenue. Citing weak demand trends, CTSH lowered its full-year
earnings guidance to $3.62 per share, down from its earlier view of
$3.69 per share. Near-term puts were the options of choice ahead of
earnings, with CTSH's Schaeffer's put/call open interest ratio
(SOIR) docked at 1.20. CTSH is looking at a 9.7% drop right out of
the gate.
Avis Budget Group, Inc. (CAR - 15.90)
swung to a first-quarter loss of $23 million, or 22 cents per
share, as acquisition-related charges weighed on the company's
bottom line. On an adjusted basis, CAR booked a per-share profit of
12 cents, while revenue swelled 31% to $1.62 billion. The results
came in better than expected, with analysts calling for a loss of 1
cent per share on $1.59 billion in sales. No less than 75% of
analysts maintain a "strong buy" recommendation toward the stock,
with not a single "sell" to be found.
Finally,
Tyson Foods (TSN - 18.04)
banked a fiscal second-quarter profit of $166 million, or 44 cents
per share, while revenue increased 3% to $8.27 billion. Analysts
were expecting the meat processor to earn 39 cents per share on
$8.49 billion in revenue. Short sellers reduced their bearish
exposure by more than 20% during the last two reporting periods,
and short interest now accounts for a low 3.4% of the stock's
float. TSN is up 2.4% in pre-market trading.
Earnings and Economic Data
The week kicks off with the Federal Reserve's
consumer credit report
. Quarterly earnings are due out from
Clean Energy Fuels (
CLNE
)
, Dendreon (
DNDN
),
Electronic Arts (
EA
)
,
Rackspace Hosting (RAX)
, Vivus (VVUS),
DISH Network (DISH)
, Halozyme Therapeutics (HALO), and
PetMed Express (PETS)
.
Overseas Trading
Stocks in Asia ended broadly lower today, as traders were
rattled by the outcomes of key euro-zone elections over the
weekend. In both France and Greece, voters removed incumbent
politicians who had supported unpopular austerity measures --
throwing new doubts on the fiscal future of the debt-burdened
region. Additionally, investors had a chance to respond to weak
U.S. jobs data, which sparked Friday's sell-off on Wall Street. By
the close, Japan's Nikkei lost 2.8%, Hong Kong's Hang Seng gave up
2.6%, South Korea's Kospi fell 1.6%, and China's Shanghai Composite
closed fractionally lower.
Greece is the most pressing concern in Europe at midday, as the
defeat of French President Nicolas Sarkozy had been telegraphed by
preliminary election results. The two political parties that helped
Greece secure a euro-zone bailout saw their voter support weaken
considerably, suggesting that the country may be veering closer
toward a disorderly bankruptcy. At last check, the German DAX is
down 0.6%, and the French CAC 40 has advanced 0.1%. Markets in the
U.K. are closed for holiday.
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
.
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