The Dow Jones Industrial Average (DJIA) attempted to bounce back
from a triple-digit loss yesterday, but the pressure proved to be
too much. The blue-chip barometer is pointed lower once again this
morning, with futures trading about 45 points below fair value as
traders grow anxious ahead of data on the health of the U.S.
economy in the second quarter. The Dow remains pinned between
support near 10,400 and resistance in the 10,600 region, though a
negative reaction to this morning's flood of economic data could
send the venerable average down for a test of support near 10,350.
Elsewhere, the S&P 500 Index (SPX) is headed for an opening
drop of about 6 points. Support for the broad-market index remains
near 1,095, while resistance is holding firm in the 1,115 region,
which is also home to the SPX's 200-day moving average. Should
1,095 fail as support, look for the SPX's decline to slow near
1,080. Finally, survey data from the
American Associate of Individual Investors
points toward the largest bullish percentage (40%) since mid-June,
while the bearish percentage (33.33%) rests near a one-month low.
This swing toward optimism could be a sign of short-term weakness
for Wall Street.
In earnings news, Merck & Co. Inc. (
) reported second-quarter earnings of 86 cents per share, excluding
items and one-time charges, as revenue jumped 92% to $11.35
billion. Wall Street was looking for a profit of 83 cents per share
and revenue of $11.45 billion. Merck said it expects adjusted 2010
earnings of $3.29 per share to $3.39 per share, which falls short
of the current consensus estimate for a fiscal 2010 profit of $3.37
Elsewhere, Coventry Health Care Inc. (
) reported second-quarter earnings of $1.10, excluding one-time
items and a $278 million litigation charge. Revenue for the quarter
fell 18% to $2.87 billion. Analysts were expecting earnings of 55
cents per share on revenue of $2.83 billion. For 2010, Coventry
sees earnings of $1.72 to $1.87 per share.
Finally, ITT Corp. (
) posted adjusted second-quarter earnings of $1.14 per share, on
revenue of $2.74 billion. Wall Street was looking for earnings of
$1.07 per share. ITT said it expects third-quarter adjusted
earnings to fall 6% from last year, in the range of 94 to 98 cents
per share, while revenue is seen rising 1% to $2.7 billion. For the
full year, the company sees adjusted earnings in a range of $4.08
to $4.18 per share.
On the earnings front, Arch Coal Inc. (
) and Chevron Corp. (
) are scheduled to release their quarterly earnings report today.
Keep your browser at
for more news as it breaks.
We round out the week today with 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
Equity option activity on the Chicago Board Options Exchange (
) saw 1,129,105 call contracts traded on Thursday, compared to
758,053 put contracts. The resultant single-session put/call ratio
arrived at 0.67, while the 21-day moving average held at 0.61.
**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
Every morning, our research staff analyzes the prior day and
the overnight markets, and monitors the morning wires to give you
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Overseas trading looks terrible this morning, with none of the
10 foreign indexes that we track in positive territory. What's
more, the cumulative average return on the collective stands at a
loss of 0.73%. In Asia, Japanese stocks lead the retreat, with
exporters taking a large hit due to a strengthening yen and weak
employment numbers. Meanwhile, European shares are headed lower,
despite news that the unemployment rate across the euro-zone held
flat at 10% in June.
Currencies and Commodities
The U.S. Dollar Index appears to be rebounding from a multi-week
low in pre-market trading. The index bounced off short-term support
near 81.50 in Asian trading, and is attempting to repair some of
this week's damage. Heading into the open, the index is up 0.24% at
81.84. Gold futures, meanwhile, are marginally higher, adding about
$2.50 an ounce to trade at $1,173.70. The malleable metal is
currently off about 1.6% for the week. Finally, crude futures have
dropped 52 cents to trade at $77.84 per barrel in pre-market
activity. Crude prices continue to meet with resistance near the
Unusual Put and Call Activity:
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