The Dow Jones Industrial Average (DJIA) gave up 107 points on
Tuesday, slipping below former support at the 10,350 level as
renewed concerns about European debt levels scuttled any hope of
extending the prior week's rally. This morning, however, those
fears have cooled following a successful Portuguese debt auction.
With the Fed's Beige Book set to hit the Street later today,
optimism is creeping back into the market, as futures on the DJIA
and the S&P 500 Index (SPX) are trading 43 points and 3 points
above fair value, respectively. The Dow could reclaim support at
the 10,350 level in early trading, but resistance still looms
overhead in the 10,450 area, which is home to the blue-chip
barometer's 200-day moving average. As for the SPX, support lies in
the 1,090 area, but yesterday's decline has placed the broad-market
index back below resistance in the 1,100 region.
Looking to spread the blame around, BP plc (
) said in a report released this morning that "a sequence of
failures involving a number of different parties" led to the
explosion and the massive Gulf of Mexico oil spill. According to
the report, decisions made by "multiple companies and work teams"
contributed to the accident. "It is evident that a series of
complex events, rather than a single mistake or failure, led to the
tragedy," said outgoing CEO Tony Hayward. "Multiple parties,
including BP, Halliburton, and Transocean were involved."
Separately, Fitch Ratings lifted its long-term issuer default
rating on BP by three levels to A from BBB. Fitch said the upgrade
reflects an end to the threat of further leaks from the Macondo
well in the Gulf of Mexico, as well as the "improved visibility of
potential liability scenarios" that the company could face.
In earnings news, Ciena Corp. (
) said that its third-quarter net loss widened to $109.9 million,
or $1.18 per share. On an adjusted basis, the company posted a loss
of 9 cents per share. Revenue fell to $164.8 million. Analysts were
looking for a loss of 32 cents per share. Looking ahead, Ciena
expects fourth-quarter revenue to rise by 5% from a year ago.
Finally, Smithfield Foods Inc. (
) swung to a fiscal first-quarter profit of $76.3 million, or 46
cents per share, from a loss of $107.7 million, or 75 cents per
share, a year earlier. Sales rose 7% to $2.9 billion. Analysts were
expecting earnings of 46 cents per share on sales of $2.99 billion.
The company reiterated its "positive outlook" for the year.
On the earnings front, The Talbots Inc. (
), The Men's Wearhouse Inc. (
), Shanda Games Limited (
), and Shuffle Master Inc. (
) will release their quarterly earnings reports today. Keep your
for more news as it breaks.
The Fed's Beige Book for September will be released later today,
along with the usual weekly report on U.S. petroleum supplies.
Tomorrow, we'll get the weekly report on initial jobless claims,
along with the trade balance report from the Commerce Department.
There are no major economic reports scheduled or Friday.
Equity option activity on the Chicago Board Options Exchange (
) saw 791,779 call contracts traded on Tuesday, compared to 477,543
put contracts. The resultant single-session put/call ratio arrived
at 0.60, while the 21-day moving average held at 0.63.
**The volume data shown above is from the Nasdaq and NYSE
exchanges only. It does not include regional volume activity,
which means that other daily volume quotes you see may be
Click here for the new summer issue of
Overseas trading is mixed this morning, as only six of the 10
foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a loss of
0.17%. In Asia, the yen tagged a 15-year high versus the U.S.
dollar, sending Japanese shares sharply lower in Tokyo. Japan's
Nikkei closed with a loss of more than 2%, as banking stocks, which
were already overburdened by renewed European concerns, were
pressured by the yen's unchecked rally. Speaking of Europe, banking
stocks remain weak this morning, but the region is mostly higher in
the wake of a successful Portuguese debt auction.
Currencies and Commodities
Commodities are taking center stage this morning, with crude
retreating in the face of continued weakness in Asia, while gold
prices push steadily toward all-time high territory. While the lead
contract is currently up a mere $1.40 at $1,260.70 an ounce in
London, gold futures tagged a fresh high of $1,262.30 an ounce - a
two-month high for the December contract, and higher than
yesterday's record settlement high of $1,259.30 an ounce in New
York. Meanwhile, weaker equity markets in Asia and high U.S.
petroleum stockpiles continues to apply pressure to crude futures.
Heading into the open, the most active contract is down 13 cents at
$73.96 per barrel. Finally, the U.S. Dollar Index has slipped 0.14%
to 82.71, as the greenback rallies against the euro, but continues
to struggle versus the Japanese yen.
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our
Open Interest Configurations
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
for free daily delivery, straight to your inbox, before the
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.