Opening View: DJIA Bulls Stake Claims Ahead of Jobless Data

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The Dow Jones Industrial Average (DJIA) ended its winning streak at four sessions in a row on Wednesday, with disappointing durable goods orders applying pressure early in yesterday's trading. This morning, however, the Dow appears to be headed firmly higher, with futures on the blue-chip barometer trading about 50 points above fair value. What's more, if the weekly initial jobless claims report comes in better than expected, we could see the DJIA break out above resistance in the 10,600 area - a level that rejected the Dow on June 21. Turning toward the S&P 500 Index (SPX), the broad-market index found short-tem support in the 1,105 region on Wednesday, as resistance in the 1,115 region and its 200-day moving average proved too much to overcome. The SPX is trading about 6 points above fair value heading into the open, so we could see the index challenge this technical hurdle once again this morning. If jobless claims come in sour, look for support near 10,400 on the Dow, and 1,090 on the SPX. Finally, the CBOE Market Volatility Index (VIX) reclaimed its 200-day trendline on Wednesday, though resistance is looming overhead at its 10-day and 20-day moving averages near 24.50 and 26, respectively.

In earnings news, Motorola Inc. ( MOT ) reported a second-quarter profit of $162 million, or 7 cents per share. Adjusted earnings were 9 cents per share, while sales slipped to $5.41 billion. Analysts were looking for earnings of 8 cents per share of profit on $5.2 billion of revenue.

Elsewhere, Colgate-Palmolive Co. ( CL ) posted a second-quarter profit of $603 million, or $1.17 per share, with sales climbing to $3.81 billion. Wall Street was expecting a profit of $1.17 per share, with sales seen coming in at $3.95 billion. Looking ahead, CL lowered its full-year earnings guidance by 10 to 15 cents per share due to currency devaluation in Venezuela.

Finally, Potash Corp. of Saskatchewan ( POT ) said that its second-quarter net profit more than doubled to $472 million, or $1.55 per share, as revenue jumped 68% to $1.44 billion. Analysts had expected earnings of $1.21 per share on sales of $1.4 billion. "The undeniable need for sustainable food production continued to drive fertilizer demand and our performance in the second quarter," said CEO Bill Doyle. The company said it expects 2010 earnings of $5.00 to $5.50 per share, surrounding Wall Street's view for annual earnings of $5.30 per share.

Earnings Preview

On the earnings front, Avon Products Inc. ( AVP ), Barrick Gold Corp. ( ABX ), Celgene Corp. ( CELG ), Exxon Mobil Corp. ( XOM ), Northrop Grumman Corp. ( NOC ), Sony Corp. ( SNE ), Strayer Education Inc. ( STRA ), Wynn Resorts Limited ( WYNN ), Chiquita Brands International Inc. ( CQB ), Coinstar Inc. ( CSTR ), Expedia Inc. ( EXPE ), First Solar Inc. ( FSLR ), McAfee Inc. ( MFE ), and MetLife Inc. ( MET ) are scheduled to release their quarterly earnings report today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The weekly report on initial jobless claims is the lone economic report slated for release today, while tomorrow rounds out the week 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 Michigan.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 926,981 call contracts traded on Wednesday, compared to 661,957 put contracts. The resultant single-session put/call ratio arrived at 0.71, while the 21-day moving average held at 0.61.

Volatility indices

NYSE and Nasdaq summary

**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.**

Dow, S&P and Nasdaq futures

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Overseas Trading

Overseas trading is in fine shape this morning, as eight of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.31%. In Asian trading, Japanese markets headed lower in response to poor U.S. economic data. Meanwhile, optimism surrounding China's economic growth bolstered Shanghai stocks and provided ballast for the rest of the region. Strong earnings from the likes of France Telecom and Siemens are helping to push regional European indexes higher this morning. What's more, economic data is also providing lift, as economic sentiment in the euro zone rose to 101.3 in July from 99.0 in June, the European Commission reported. The results were driven by a strong rise in Germany.

Overseas markets

Currencies and Commodities

The U.S. Dollar Index breached support at the 82 level in Asian trading, with the greenback plunging to a roughly three-month low versus its major competitors. Despite the pullback in the U.S. dollar, commodities are not benefiting as much you might expect. Gold futures, for instance, have added only about $5.50 to trade at $1,167.90 in London, as the malleable metal hovers near its May 2010 lows. Finally crude futures are up 32 cents at $77.31 per barrel, as the lead contract finds support near its 20-day moving average.

Currencies and commodities

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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