Opening View: DJIA Futures Drop on Unexpected Chinese Trade Deficit

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Technically, the DJIA yesterday closed its second session above its 20-day moving average and the 12,200 level, but that winning streak could be put to the test today. Look for support to materialize near 12,150, with the 12,050-12,000 region providing an additional backstop if things turn ugly. The SPX, however, remains below its 20-day moving average, and could be pressured back below its 10-day trendline if premarket selling pressure carries over into the open. Support should hold near the index's rising 10-week moving average, however, as the SPX has not closed a week below this trendline since late August 2010.

In earnings news, Smithfield Foods Inc. ( SFD ) reported a third-quarter profit of $202.6 million, or $1.21 per share, up from $37.3 million, or 22 cents per share, a year ago. Adjusted earnings for the quarter were 84 cents per share. Sales came in at $3.19 billion. Wall Street was expecting earnings of 69 cents per share on revenue of $3.13 billion.

Elsewhere, coffee kings Starbucks Corp. ( SBUX ) and Green Mountain Coffee Roasters Inc. ( GMCR ) will be in focus today, after SBUX announced that it will sell its coffee and Tazo brand tea using GMCR's K-Cup individual-service packages. The new offerings will be available in stores this fall, the companies said. GMCR has surged nearly 30% in premarket trading.

After the close last night, Jo-Ann Stores, Inc. (JAS) posted a fourth-quarter profit of $40.4 million, or $1.53 per share, compared to earnings of $37.1 million, or $1.36 per share, a year ago. Excluding items, JAS said it earned $1.60 per share, topping Wall Street's expectations for earnings of $1.53 per share. Revenue rose 3.6% to $624.1 million, as same-store sales gained 2%.

Earnings Preview

On the earnings front, Canadian Solar ( CSIQ ), National Semiconductor ( NSM ), Clean Energy Fuels (CLNE), and Smith & Wesson (SWHC) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The weekly report on jobless claims hits the Street today, along with import/export data for January. We wrap up the week on Friday with the preliminary Thomson Reuters/University of Michigan consumer sentiment survey for March, along with comments from New York Fed President William Dudley.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,112,251 call contracts traded on Wednesday, compared to 680,820 put contracts. The resultant single-session put/call ratio arrived at 0.61, while the 21-day moving average rose to 0.58.

Volatility indices

NYSE and Nasdaq summary

Dow, S&P and Nasdaq futures

Trading the News: A Contrarian View. Check out this special report from Bernie Schaeffer here.

Overseas Trading

Overseas trading is in poor shape this morning, as only one of the 10 foreign indexes that we track is in positive territory. The cumulative average return on the collective stands at a loss of 0.91%. In Asian trading, regional markets retreated after China reported a $7.3 billion trade deficit in February, versus expectations for a surplus. Meanwhile, Moody's Investor Services cut Spain's bond rating by one notch to Aa2 from Aa1, with a negative outlook. The broad-based selling pressure has spilled over into European trading, where news that the Bank of England once again left its key lending rate unchanged provided little in the way of inspiration.

Overseas markets

Currencies and Commodities

The U.S. dollar has gained ground on the euro this morning, with the greenback strengthening in the wake of Spain's downgraded debt rating. At last check, the U.S. Dollar Index was seen higher by 0.4% at 77.03. Elsewhere, crude futures are headed lower despite continued fighting in Libya. In electronic trading, the April crude futures contract has fallen $1.29 to $104.32 per barrel. Finally, gold futures are also being pressured by a stronger U.S. dollar. In London, the lead gold futures contract has dropped $10.10 to $1,419.50 an ounce.

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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This article appears in: Investing , Options

Referenced Stocks: CSIQ , GMCR , NSM , SBUX , SFD

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