Can the Dow Keep Its Cool Above 13,200 Post-Payrolls?

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Despite a brief afternoon breach in yesterday's session, the Dow Jones Industrial Average (DJI) was able to keep its hold on the 13,200 mark -- a level not cracked on a daily closing basis since April 25 . This noteworthy neighborhood remains in play heading into today's session, with futures on the broad-market barometer churning just below breakeven.

Among equities in focus, LinkedIn's (LNKD ) quarterly results could encourage some love from the brokerage bunch; short sellers may jump ship in light of Zagg's (ZAGG ) post-earnings parade; and, Kraft Foods' (KFT - 39.59) results could please options traders.

And now, on to the numbers...

Dow, S&P and Nasdaq futures

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,081,439 call contracts traded on Thursday, compared to 850,990 put contracts. The resultant single-session put/call ratio arrived at 0.79, while the 21-day moving average was 0.64.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

Sapp reveals, "The levels to watch on the SPX today will be 1,360 and 1,420 . There's a very good chance one of them will get tested due to the market's reaction to the jobs report , and watching the reaction around those levels will be key."

Currencies and Commodities

  • The U.S. dollar index is pointed higher this morning, with the greenback up 0.1% at $79.29.
  • Crude oil is set to end the week with a thud, with the front-month contract down 1.1% at $101.37 per barrel.
  • Will gold futures make it five losses in a row ? All indications say yes, with the malleable metal 0.2% lower at $1,632 an ounce.

Currencies and commodities

In earnings news, LinkedIn Corporation (LNKD - 109.41) said its first-quarter profit more than doubled, arriving at $5 million, or 4 cents per share. Excluding items, LNKD banked a per-share profit of 15 cents, while revenue swelled 101% to $188.5 million. The results came in well above the Street's forecast for adjusted earnings of 9 cents per share on $178.58 million in sales. LNKD could be positioned for some post-earnings upgrades, as 53% of analysts still maintain a tepid "hold" suggestion toward the stock. LNKD is up more than 9% ahead of the bell.

Zagg Incorporated (ZAGG - 11.93) reported a first-quarter profit of $5.1 million, or 16 cents per share, up 54% from the comparable quarter of 2011. Excluding items, earnings came in at 46 cents per share, while revenue surged 105.7% to $55.5 million. Analysts, on average, were expecting a profit of 14 cents per share on sales of $52 million. ZAGG may be poised for some short-covering activity in the near term. Short interest accounts for a staggering 43% of the stock's available float, and the security is set to open the session with a 5% lead.

Kraft Foods (KFT - 39.59) said its first-quarter profit edged up 1.8% to $813 million, or 46 cents per share, while revenue increased 4.1% to $13.09 billion. Excluding items, KFT earned 57 cents per share. The results surpassed analysts' expectations, which called for a profit of 56 cents per share on $13.05 billion in revenue. Options players were picking up short-term calls on KFT ahead of earnings, with the stock's Schaeffer's put/call open interest ratio docked at 0.90. KFT is 0.7% higher in pre-market trading.

Earnings and Economic Data

The week wraps up with the Labor Department's report on nonfarm payrolls and the unemployment rate . We'll hear earnings from Arcos Dorados ( ARCO ) , Duke Energy ( DUK ), Estee Lauder ( EL ) , Exelon (EXC), and The Washington Post (WPO) .

Overseas Trading

Asian markets ended mostly lower, as traders seemed jittery ahead of today's U.S. jobs data. Weakness in gold and oil pressured miners and energy stocks, while a lackluster sales report from China Vanke weighed on property developers. However, rising hopes for a market-boosting maneuver by regulators helped Shanghai-listed stocks battle back from early losses. By the close, Hong Kong's Hang Seng declined 0.8%, South Korea's Kospi gave up 0.3%, and China's Shanghai Composite advanced 0.5%. Markets in Japan are closed for holiday.

European equities are pointed south at midday, with investors pricing in some disappointing economic data. Markit's composite euro-zone purchasing managers index (PMI) tumbled to 46.7 in April, down from the March reading of 49.1. The monthly decline points to an accelerating pace of contraction in regional business activity. At last check, the French CAC 40 is down 0.2%, the German DAX has shed 0.4%, and London's FTSE 100 is 0.7% lower.

Overseas markets

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 .

Unusual options activity - puts

Unusual options activity - calls

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.



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This article appears in: Investing , Options

Referenced Stocks: ARCO , CBOE , DUK , EL , SPX

Schaeffer's Investment Research

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As of 11/26/2014, 04:15 PM

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