The Dow Jones Industrial Average (DJIA) logged its seventh
consecutive positive finish on Tuesday, as the blue chip barometer
broke out to another multi-year high above the 12,200 level.
However, concerns about the potential need for China to further
tighten its monetary policy are creating drag this morning. In
fact, futures on the DJIA and the S&P 500 Index (SPX) are
trading roughly 10 points and 3.8 points below fair value,
respectively. Later this morning, Wall Street will turn its
attention toward Capitol Hill, where Federal Reserve Chairman Ben
Bernanke will testify on the Fed's economic outlook and monetary
policy before the House Budget Committee at 10 a.m. Eastern time.
Technically, traders will want to keep an eye out for potential
support in the 12,200 region for the DJIA, with the 12,150 region
potentially offering up additional leverage if selling pressure
takes hold. Resistance, meanwhile, could emerge in the
12,250-12,300 region. Turning to the SPX, the 1,315 area could
emerge as a floor for the index, while stronger support lies in the
1,305 region, which is home to the index's 10-day moving average.
Resistance remains in the 1,320-1,325 area.
In earnings news, The Coca-Cola Company (
) reported that its fourth-quarter net income rose to $2.37
billion, or $1.02 per share, as revenue advanced to $8.67 billion
from $8.27 billion last year. The company said that North American
volume rose for the first time in more than two years. "We firmly
believe that North America will be a growth market of great
opportunity for the next 10 years and beyond," said CEO Muhtar
Kent. Excluding items, KO earned $1.06 per share in the period,
besting Wall Street's expectations for a profit of $1.03 per
After the close last night, The Walt Disney Co. (
) announced that its first-quarter profit spiked 54% from the same
period last year, helped in part by solid international video sales
of "Toy Story 3." For the quarter, DIS said that it earned $1.33
billion, or 68 cents per share, with revenue rising to $10.7
billion. The average consensus estimate, per
, was for a profit of 56 cents per share on sales of $10.5
Finally, Take-Two Interactive Software Inc. (
) said that its third-quarter earnings rose 7% to $40.6 million, or
45 cents per share, due to stronger-than-expected video game sales.
On a non-GAAP basis, TTWO's profit came in at $49.5 million, or 52
cents per share, even as revenue slipped 7% to $334.3 million. Wall
Street had forecast third-quarter earnings of 34 cents per share on
revenue of $310 million, according to
On the earnings front, Alpha Natural Resources Inc. (
), IntercontinentalExchange Inc. (
), Northrop Grumman Corp. (NOC), Polo Ralph Lauren Corp. (RL),
Activision Blizzard Inc. (ATVI), Advance Auto Parts Inc. (AAP),
Akamai Technologies Inc. (AKAM), The Allstate Corp. (ALL), Cisco
Systems Inc. (CSCO), MetLife Inc. (MET), Prudential Financial Inc.
(PRU), and Whole Foods Market Inc. (WFMI) are slated to release
their quarterly earnings reports today. Keep your browser at
for more news as it breaks.
The usual weekly report on crude inventories is the sole report
on the docket today, while tomorrow sports only the weekly report
on initial jobless claims. Finally, we round out the week on Friday
with the December trade deficit and the University of Michigan's
initial consumer sentiment index for February.
Equity option activity on the CBOE saw 1,338,079 call contracts
traded on Tuesday, compared to 723,200 put contracts. The resultant
single-session put/call ratio arrived at 0.54, while the 21-day
moving average held at 0.54.
**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
Trading the News: A Contrarian View.
Check out this special report from Bernie Schaeffer
Overseas trading is looking kind of grim this morning, as only
two of the 10 foreign indexes that we track are in positive
territory. The cumulative average return on the collective stands
at a loss of 0.51%. In Asia, regional markets headed sharply lower
on speculation that Beijing may need to take additional steps to
rein in inflation, even after raising interest rates yesterday.
Toyota Motor Corp. (TM) was a standout in Tokyo, however, with the
shares surging 5.2% after the company lifted its earnings forecast.
European markets are taking their cues from Asia in the early
going, with stocks retreating in the wake of a fresh rush of
Currencies and Commodities
Crude futures rebounded from their lowest levels in more than a
week in overnight trading, as traders shrugged off the potential
demand implications of China's rate hike. Heading into the open,
the March crude contract has added 35 cents to trade at $87.29 per
barrel. A falling U.S. dollar is helping provide lift for
commodities this morning, with the U.S. Dollar Index off roughly
0.02% at 77.99 at last check. The greenback has struggled against
the euro and the yen following China's monetary tightening.
Finally, gold futures are stagnating this morning, as the weaker
dollar and China's inflationary problems play tug-of-war with the
precious metal. In London, gold has fallen 30 cents to $1,363.80 an
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.