The Dow Jones Industrial Average (DJIA) soared to its third
consecutive 100-point rally on Monday - a feat last accomplished on
Jan. 2, 2009, and one that the DJIA has completed only eight times
since 1997. During this three-day bullish binge, the Dow has added
roughly 4%, while the CBOE Market Volatility Index (VIX) has
plunged some 11.4%. The blue-chip barometer is currently perched
above potential support near 10,500, with resistance looming
overhead near 10,600 (site of the Dow's June 21 high).
Incidentally, the VIX is trading at a two-month low, below its
200-day moving average. The S&P 500 Index (SPX), meanwhile, is
perched above its 200-day moving average for the first time since
June 21, as the broad-market index looks to leave the dregs of July
in the rear-view mirror. While the SPX has potential support at its
200-day moving average and the 1,100 level, the index must still
overcome its June high near 1,130. Heading into the open, Wall
Street has a bullish bias ahead of a handful of key economic
reports. Futures on the DJIA and the SPX are trading 34 points and
2.6 points above fair value, respectively. Can the Dow make it four
in a row?
In earnings news, Du Pont (
DD
) reported second-quarter net income of $1.16 billion, or $1.26 per
share. Excluding items, DD earned $1.17 per share, blowing past
analyst expectations for earnings of 93 cents per share. Net sales
climbed to $8.6 billion. "We grew sales across every segment," said
CEO Ellen Kullman. The company lifted its full-year earnings
outlook to a range of $2.90 to $3.05 per share, excluding
significant items, from its previous range of $2.50 to $2.70 per
share.
Elsewhere, BP plc (
BP
) reported a $17.2 billion loss in the second quarter, as it booked
$32.2 billion in charges linked to the Gulf oil spill. BP also
named Robert Dudley as its new chief executive, replacing Tony
Hayward.
Finally, Office Depot Inc. (
ODP
) said that its second-quarter net loss narrowed to $18.7 million,
or 7 cents per share. Excluding one-time costs related to
restructuring, ODP earned 2 cents per share. Sales fell to $2.7
billion, from $2.8 billion. Wall Street analysts expected a loss of
17 cents per share on revenue of $2.75 billion.
Earnings Preview
On the earnings front, AK Steel Holding Corp. (
AKS
), CIT Group Inc. (
CIT
), Cummins Inc. (
CMI
), Domino's Pizza Inc. (
DPZ
), L-3 Communications Holdings Inc. (
LLL
), LCA-Vision Inc. (
LCAV
), Lexmark International Inc. (
LXK
), Lockheed Martin Corp. (
LMT
), United States Steel Corp. (
X
), Teva Pharmaceutical Industries Ltd. (
TEVA
), Under Armour Inc. (
UA
), Valero Energy Corp. (
VLO
), Aetna Inc. (
AET
), AFLAC Inc. (
AFL
), Broadcom Corp. (
BRCM
), Buffalo Wild Wings (
BWLD
), CB Richard Ellis Group Inc. (
CBG
) Cephalon Inc. (
CEPH
), DreamWorks Animation SKG Inc. (
DWA
), Fiserv Inc. (
FISV
), Massey Energy Co. (
MEE
) and Panera Bread Co. (
PNRA
) are scheduled to release their quarterly earnings reports today.
Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
On the economic front, we'll get the Case-Shiller home price
index for May and the Conference Board's Consumer Confidence Index
for July this morning, while Wednesday offers up the weekly report
on U.S. petroleum supplies. On Thursday, we'll see reports on
weekly initial jobless claims and the Fed's Beige Book. On Friday,
we'll get the latest numbers on second-quarter gross domestic
product, along with the Chicago Purchasing Managers' Index for
July, and a final look at July consumer confidence as measured by
Reuters and the University of Michigan.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (
CBOE
) saw 1,095,255 call contracts traded on Monday, compared to
608,484 put contracts. The resultant single-session put/call ratio
arrived at 0.56, while the 21-day moving average slipped to
0.62.
**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
higher.**
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Overseas Trading
Overseas trading has a bullish bias this morning, as seven of
the 10 foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a gain of
0.46%. In Asian trading, regional indexes finished mixed, as
investors locked in profits from a solid winning streak. Hong
Kong's Hang Seng, in particular, extended its uptrend to six
sessions in a row. In Japan, the country's big three banks led the
region's modest gains after the Basel Committee on Banking
Supervision agreed to broaden the rules regarding core capital
requirements at banks. In Europe, the financial sector is leading a
broad rally across the region after UBS and Deutsche Bank reported
better-than-expected quarterly profits.
Currencies and Commodities
There isn't much activity in dollar and commodities traders this
morning, as many investors are in a holding pattern ahead of data
on home prices and consumer confidence. The U.S. Dollar Index is
hovering just above support at the 82 level heading into the open.
The index has not closed a session below this level since April 30.
Meanwhile, crude futures are hovering just above $79 per barrel, up
8 cents in pre-market trading. Oil prices have once again rallied
into resistance in the $79-$80 per-barrel range, and could be
poised to roll over from a double-top formation. Finally, gold
futures have added 10 cents to trade at $1,187.10 in London. The
malleable metal has lacked the buying strength to reclaim the
psychologically important $1,200 level, with the region now
providing stiff overhead resistance on a short-term basis.
Unusual Put and Call Activity:
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