Dow's 110-Point Jump Could Pull the VIX Below 20

By
A A A
Share |

Bargain hunters are circling the Street, after five days of selling in U.S. equities. All three major market indexes are pointed north of breakeven, with the Dow Jones Industrial Average (DJIA) set to erase a large portion of Tuesday's massive sell-off .

Traders have a slew of indicators to contend with today, including:

  • the VIX, with the " fear gauge " testing the water in the 20 area, a key retracement level
  • domestic economic reports in the form of import and export prices, the Fed's Beige book , and the latest in weekly crude inventories
  • Alcoa's (AA ) earnings release. Will the results provide a directional path for the broad markets?
Among equities in focus, Standard Microsystems (SMSC ) also took its turn in the earnings confessional, while Titan Machinery's (TITN ) results are prompting a pre-market price swing.

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 1,501,006 call contracts traded on Tuesday, compared to 1,054,591 put contracts. The resultant single-session put/call ratio arrived at 0.70, while the 21-day moving average was 0.61.

NYSE and Nasdaq summary

Volatility indices

Currencies and Commodities

  • The U.S. dollar index has retreated this morning, with the greenback 0.4% lower at $79.58.
  • Crude oil is set to rebound , with the front-month contract 0.6% higher at $101.58 per barrel.
  • Gold futures , meanwhile, are churning near breakeven, with the malleable metal trading at $1,660.60 an ounce.

Currencies and commodities

In earnings news, Alcoa Inc. (AA - 9.32) posted a first-quarter profit of $94 million, or 9 cents per share, a 69% year-over-year drop from $308 million, or 27 cents per share. Excluding items, earnings arrived at 10 cents per share. Revenue rose a slight 0.8% to $6.01 billion. The results came in above analysts' expectations, with the Street calling for a per-share loss of 4 cents on $5.77 billion in sales. AA is up 5.5% in pre-market trading.

Standard Microsystems (SMSC - 24.32) swung to a fiscal fourth-quarter loss of $4.1 million, or 19 cents per share, down from a profit of $1.7 million, or 7 cents per share, in the year-ago period. On an adjusted basis, earnings came in at 5 cents per share, compared to 26 cents per share in the previous year. Meanwhile, revenue fell by 11% to $89.9 million, which SMSC attributed to weaker demand. Analysts, on average, were expecting a loss of 17 cents per share on sales of $91.1 million. Looking ahead, the company is forecasting current-quarter earnings of 29 cents to 38 cents per share on revenue between $98 million and $102 million. Wall Street, on the other hand, is predicting a profit of just 27 cents on sales of $98 million.

Titan Machinery (TITN - 27.47) banked a fiscal fourth-quarter profit of $17.8 million, or 84 cents per share, up 72% from its year-ago earnings of $10.4 million, or 57 cents per share. Revenue for the quarter surged 65% to $607 million, as gross margin edged up to 15.3% from 15.2%. The results crushed analysts' expectations, which called for a profit of 53 cents per share on $439 million in revenue. For the full year ahead, TITN anticipates earnings of $2.55 to $2.75 per share on revenue between $1.95 billion and $2.1 billion. By contrast, analysts were looking for a full-year profit of just $2.06 per share on $1.68 billion in revenue. TITN is set to jump 20% right out of the gate.

Earnings and Economic Data

Today's economic docket hits the Street with a bang, as import and export prices , the Federal Reserve's Beige Book , the Treasury Budget , and weekly crude inventories are all on tap. Adtran ( ADTN ) and Apogee Enterprises ( APOG ) are slated to report earnings. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Overseas Trading

European equities have muscled higher at midday, led by the banking sector. Analysts at UBS today upgraded the group to "overweight," citing attractive valuations and an expected stabilization in earnings. Plus, traders have also been encouraged by an earnings beat from aluminum heavyweight Alcoa. With investor sentiment on the mend, bond yields for debt-strapped euro-zone countries have retreated from their recent highs. At last look, London's FTSE 100 is up 0.6%, the German DAX has advanced 1.3%, and the French CAC 40 has tacked on 1.5%.

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.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options

Referenced Stocks: ADTN , APOG , CBOE

Schaeffer's Investment Research

Schaeffer's Investment Research
  • See all for Schaeffer's Investment Research
  • View Print Version

More from Schaeffer's Investment Research:

Related Videos

Stocks

Referenced

Most Active by Volume

89,970,926
  • $16.15 ▲ 0.12%
77,131,582
  • $58.94 ▼ 1.31%
67,336,935
  • $26.56 ▲ 1.68%
48,814,124
  • $86.20 ▲ 0.02%
47,526,126
  • $23.21 ▲ 0.78%
44,660,424
  • $23.91 ▲ 6.36%
38,799,699
  • $4.289 ▲ 4.36%
36,199,890
  • $40.01 ▼ 0.97%
As of 4/17/2014, 04:07 PM