Dow Poised to Test 13K as Wall Street's Mood Worsens

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It seems like nothing can shake Wall Street's foul mood this week, with futures on all three major market indexes pointed south this morning. A number of factors will be weighing on traders' minds today, including:

  • weekly jobless claims, which could give some indication on employment ahead of tomorrow's nonfarm payrolls report ,
  • disappointing economic news from across the pond , and
  • the 13,000 mark, which will likely be tested by the Dow Jones Industrial Average (DJIA) in the final session of an abbreviated week.
Among equities, Bed Bath & Beyond's (BBBY ) earnings pleased the Street, while fellow home furnishing retailer Pier 1 Imports, Inc. (PIR - 18.26) unveiled its newest growth plan.

And now, on to the numbers...

Dow, S&P and Nasdaq futures

Currencies and Commodities

  • The greenback is heading into the session with some positive momentum, with the U.S. dollar index up 0.3% at $80.01.
  • Crude oil , meanwhile, is on the rebound , with the front-month contract 0.4% higher at $101.84 per barrel.
  • Gold futures are on the mend, as well, with the malleable metal last seen 0.6% north of breakeven at $1,623.80 an ounce.

Currencies and commodities

Bed Bath & Beyond (BBBY - 66.23) reported a fiscal fourth-quarter profit of $351 million, or $1.48, up 24% from $283.5 million, or $1.12 per share, in the year-ago period. Meanwhile, revenue rose by 9.1% to $2.73 billion, boosted by a 6.8% increase in same-store sales. The results topped analysts' expectations for earnings of $1.33 per share on sales of $2.66 billion. Looking ahead, the company is forecasting a first-quarter profit of 79 cents to 83 cents per share, falling roughly in line with Wall Street's prediction for earnings of 82 cents per share. BBBY is set to pop 5.7% right out of the gate.

Meanwhile, Pier 1 Imports, Inc. (PIR - 18.26) saw its fiscal fourth-quarter earnings grow to $115.2 million, or $1.04 per share, from last year's profit of $57.1 million, or 48 cents per share. Excluding items, earnings arrived at 48 cents per share. Thanks to a 10% jump in same-store sales, overall revenue rose 12% to $476.8 million. The results were mixed, with Wall Street calling for adjusted earnings of 48 cents per share on $472.1 million in sales. In addition to declaring a quarterly cash dividend of 4 cents per share, the home goods retailer announced a three-year growth plan, with online sales in focus. For fiscal 2013, PIR projects a per-share profit of $1.06 to $1.12, compared to analysts' forecast for full-year earnings of $1.12 per share. PIR is up 1% in pre-market trading.

Earnings and Economic Data

Jobless claims are due out bright and early this morning. The market is closed tomorrow in observance of Good Friday, so traders won't have a chance to react to the Labor Department's nonfarm payrolls report until Monday. On the earnings front, we'll hear from AZZ ( AZZ ), CarMax ( KMX ) , Constellation Brands ( STZ ), Schnitzer Steel Industries ( SCHN ), SemiLEDs ( LEDS ), and WD-40 (WDFC). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Overseas Trading

Asian markets ended mixed today, as Hong Kong-listed stocks took a dive after Wednesday's holiday break. With a four-day weekend on the horizon, traders seemed unwilling to leave too much cash on the table ahead of Friday's U.S. jobs data. However, the mood was more upbeat on the mainland, after Chinese Premier Wen Jiabao railed against the "monopoly" formed by "a large number of small banks," which he views as a roadblock to optimum liquidity in the credit markets. By the close, Hong Kong's Hang Seng fell roughly 1%, Japan's Nikkei lost 0.5%, South Korea's Kospi edged up 0.5%, and China's Shanghai Composite gained 1.7%.

European equities are in the red at midday, as Wednesday's poorly received Spanish debt auction continues to weigh heavily on investor sentiment. In light of these revived debt concerns, yields on Italy's 10-year notes have climbed in sympathy with their Spanish counterparts. Cementing the gloomy mood is a disappointing report on British manufacturing production, which unexpectedly dropped 1% in February. At last check, London's FTSE 100 has lost 0.4%, the French CAC 40 is off 0.6%, and the German DAX is down 1%.

Overseas markets

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,063,443 call contracts traded on Wednesday, compared to 716,652 put contracts. The resultant single-session put/call ratio arrived at 0.67, while the 21-day moving average was 0.60.

NYSE and Nasdaq summary

Volatility indices

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

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This article appears in: Investing , Options

Referenced Stocks: AZZ , KMX , LEDS , SCHN , STZ

Schaeffer's Investment Research

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