The Dow Jones Industrial Average (DJIA) rallied nearly 50 points
on Friday, and closed last week with a gain of 0.7%. Corporate
earnings will continue to drive Wall Street this week, with
McDonald's Corp. (
) and American Express Co. (
) among those reporting today. However, investors may be taking a
cautious stance ahead of Wednesday's Federal Open Market Committee
policy statement. Heading into the open, the DJIA and the S&P
500 Index (SPX) are trading relatively flat with fair value.
Technically, the DJIA enters this week trading at its highest point
since June 2008. The 11,900 level has emerged as the next area of
potential technical resistance, while the 12,000 region will likely
contain any breakout rally from the blue chip barometer. Look for
support in the 11,750-11,800 region, which is currently home to the
Dow's 10-day moving average. As for the SPX, the broad-market index
reclaimed support at its 10-day trendline on Friday, but remains
stymied by resistance in the 1,295-1,300 region. Support for the
SPX should emerge near 1,270 -- site of its 20-day moving
In equity news, Halliburton Co. (
) reported a fourth-quarter profit of $605 million, or 66 cents per
share. Operating income jumped to 68 cents per share, as revenue
rose to $5.16 billion. Wall Street was looking for earnings of 63
cents per share on revenue of $4.86 billion. Looking ahead,
Halliburton said it sees a "favorable outlook for oil services and
technologies in 2011 and beyond."
Also, J.C. Penney Inc. (
) announced a restructuring plan that includes the closure of five
department stores and one home store. JCP will also continue to
wind down its catalog business by closing nine outlet stores in
2011 and 2012. The company expects these measures to lift earnings
by 7 cents per share in the first full year of implementation,
though they will result in a fourth-quarter charge of $30 million,
or 8 cents per share. In 2011, there will be charges of around $20
million, or 5 cents per share.
The pharmaceutical sector could also garner attention this
morning, after Novartis AG (
) agreed to acquire Genoptix Inc. (GXDX) in an all-cash deal worth
$25 a share. Also, Sanofi-Aventis SA (SNY) extended its offer of
$69 per share in cash for Genzyme Corp. (GENZ). The offer was
previously scheduled to expire on Jan. 21.
On the earnings front, McDonald's Corp. (
), PetMed Express Inc. (PETS), Albemarle Corp. (ALB), American
Express Co. (
), CSX Corp. (CSX), Packaging Corp. of America (PKG), SL Green
Realty Corp. (SLG), STMicroelectronics N.V. (STM), Texas
Instruments Inc. (TXN), VMware Inc. (VMW), and Zions Bancorporation
(ZION) are slated to release their quarterly earnings reports
today. Keep your browser at
for more news as it breaks.
There are no major economic reports scheduled for release today,
while tomorrow offers up the Case-Shiller 20-city home price index
for November and the Conference Board's Consumer Confidence Index
for January. December new home sales will arrive on Wednesday, but
the big news of the day will arrive in the afternoon, when the
Federal Open Market Committee (FOMC) issues its decision on U.S.
monetary policy. On Thursday, weekly initial jobless claims will be
joined by December's durable goods orders, while Friday rounds out
the week with a first look at fourth-quarter gross domestic product
(GDP), November's s pending homes sales, and the University of
Michigan's final look at January consumer sentiment.
Equity option activity on the CBOE saw 2,271,763 call contracts
traded on Friday, compared to 1,263,551 put contracts. The
resultant single-session put/call ratio arrived at 0.56, while the
21-day moving average held at 0.52.
**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 mixed this morning, with four of the 10
foreign indexes that we track in positive territory. The cumulative
average return on the collective stands at a loss of 0.15%. Strong
sales at Honda Motor Co. and a weakening yen helped boost Japanese
stocks in Asian trading. However, the rest of the region was
plagued by profit taking ahead of the Chinese New Year next week.
In Europe, stocks turned broadly lower, with the technology sector
leading the way after Royal Philips Electronics missed earnings
Currencies and Commodities
The U.S. dollar has gained some ground on its foreign
competitors this morning. The greenback has been especially strong
versus the euro, after news that Ireland may need to hold
elections. Commodities, meanwhile, are mixed, with crude futures
heading sharply lower, falling 71 cents to $88.40 per barrel. Gold,
however, has bounced back in London, adding $5.60 to $1,346.60 an
ounce following last week's sell-off.
Unusual Put and Call Activity:
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