After touching its highest point since December 2007, the
Dow Jones Industrial Average (DJI)
has pulled back this morning, with futures on the broad-market
index pointed modestly lower. Although Wall Street is anxiously
awaiting Friday's
nonfarm payrolls report
, a number of interesting developments are unfolding elsewhere,
including:
Among equities in focus,
Facebook
set an IPO date; analysts are changing their tune on
Chesapeake Energy (CHK )
after earnings; short sellers should be pleased with
OpenTable's (OPEN )
quarterly results; and,
TripAdvisor, Inc. (TRIP - 36.53)
is positioned to pop following its earnings announcement.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (
CBOE
) saw 1,282,507 call contracts traded on Tuesday, compared to
687,692 put contracts. The resultant single-session put/call ratio
arrived at 0.54, while the 21-day moving average was 0.62.
From the Trading Floor
"
Apple (
AAPL
)
remains in focus," observes Equities Analyst Bryan Sapp. "The stock
is right at its 50-day moving average, and bears are beginning to
get bold. I'm also watching the
Russell 2000 Index (
RUT
)
and the 830 level -- it's an area that it has had a lot of trouble
getting through, and also marked the intraday top yesterday."
Sapp continues, "
The National Association of Active Investment Managers
(NAAIM)
number is really low, given where we are in the market. The current
reading is 48.31, and the low since March is 46.14 (the high was
71.97 on March 28). The SPX is less than 2% off its 52-week high,
but for some reason sentiment has turned sour. Most of the bears
are arguing that it's because of economic data, but the ISM number
Tuesday morning more than caught them off guard. In my opinion,
this creates much more upside potential than downside."
Currencies and Commodities
- The
U.S. dollar index
is headed higher this morning, with the greenback up 0.5% at
$79.23.
- After closing at a
five-week high
on Tuesday,
crude oil
has pulled back, with crude for June delivery down 0.5% at
$105.63 per barrel.
-
Gold futures
are 0.6% lower, with the malleable metal last seen at $1,653.10
an ounce.
In equities news, the much-anticipated launch of
Facebook, Inc.'s
initial public offering (IPO) has finally been unveiled. The social
media site will begin trading public shares on Friday, May 18, with
some speculating that the IPO could value the company at roughly
$100 billion.
Elsewhere, shortly after announcing that embattled CEO Aubrey
McClendon will surrender his role as chairman,
Chesapeake Energy (CHK - 19.60)
said its first-quarter loss narrowed to $28 million, or 11 cents
per share, while revenue improved 50% to $2.42 billion. Excluding
items, CHK earned 18 cents per share. The results fell way short of
Wall Street's expectations, which called for earnings of 29 cents
per share on $2.75 billion in revenue. After receiving a
brokerage boost
as recently as April 30, analysts have begun to jump ship on CHK,
with the stock getting smacked by slew of downgrades and
price-target cuts following last night's announcement. CHK is down
8.7% in pre-market trading.
OpenTable (OPEN - 43.68)
reported an adjusted first-quarter profit of 40 cents per share,
while revenue rose 17% to $39.4 million. The results were mixed,
with analysts looking for a profit of 34 cents per share on $39.6
million in revenue. For the full year ahead, OPEN predicted revenue
of $158 million to $164 million, falling short of Wall Street's
forecast of $168.2 million.
Short sellers
should be pleased with the results, as OPEN is staring at a 15.7%
plunge right out of the gate. Short interest accounts for a
staggering 46.5% of the stock's available float.
After spinning off from
Expedia (EXPE )
in December,
TripAdvisor, Inc. (TRIP - 36.53)
earned a first-quarter profit of 35 cents per share, breakeven on a
year-over-year basis. Excluding items, earnings arrived at 38 cents
per share, while revenue soared 23% to $183.7 million. The results
handily beat analysts' expectations for adjusted earnings of 34
cents per share on $174.4 million in sales. Options players were
stocking up on short-term calls ahead of earnings, with TRIP's
Schaeffer's put/call open interest ratio (SOIR) resting at a
call-heavy 0.38. TRIP is poised for a 17.7% post-earnings pop.
Earnings and Economic Data
Today's docket brings us the ADP private-sector payrolls report,
factory orders, and the usual weekly crude inventories.
Acme Packet (
APKT
)
, Beazer Homes (BZH),
Comcast (CMCSA)
, CVS Caremark (CVS),
Garmin (GRMN)
, Hartford Financial Services (HIG),
JDS Uniphase (JDSU)
, MasterCard (MA),
Onyx Pharmaceuticals (ONXX)
, Time Warner (TWX),
ValueClick (VCLK)
, Visa (V),
Weight Watchers (WTW)
, Whole Foods Market (WFM),
Yelp (YELP)
, and Zillow (Z) are all scheduled to step into the earnings
confessional.
Overseas Trading
Stocks in Asia ended higher across the board today, as traders
responded enthusiastically to stronger-than-forecast U.S.
manufacturing data. After a brief holiday break, the market also
had a chance to react to China's official purchasing managers index
(PMI), which rose for the fifth straight month in April. Meanwhile,
over in Japan, a softer yen gave exporters a boost ahead of the
long holiday weekend. By the close, China's Shanghai Composite
climbed 1.8%, Hong Kong's Hang Seng added 1%, South Korea's Kospi
advanced 0.9%, and Japan's Nikkei edged up 0.3%.
European markets are mixed at midday, with stocks giving back
most of their early gains. Upbeat global factory data contributed
to a bullish mood this morning, but traders were rattled after a
Eurostat report showed euro-zone unemployment hitting a new high of
10.9% in March. At last look, the French CAC 40 is up 0.7%, the
German DAX has tacked on 0.2%, and London's FTSE 100 is off
0.7%.
Unusual Put and Call Activity:
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