The Dow Jones Industrial Average (DJIA) is headed toward another
uncertain start, as traders brace for a first look at
fourth-quarter U.S. gross domestic product. Corporate earnings
haven't exactly set a bullish tone, either, with Microsoft Corp.'s
) report falling flat, and Amazon.com Inc. (
) selling off on weak operating margins. Still, Wall Street remains
in a wait-and-see mode, as futures on the DJIA and the S&P 500
Index (SPX) are trading roughly 7 points above and 0.6 point below
fair value, respectively.
The 12,000 level is becoming quite a thorn in the Dow's side,
capping the DJIA throughout the past week. The 12,050-12,100 region
could be the next area of resistance, if traders react well to
today's economic data, while support remains firm near 11,900 and
the Dow's 10-day moving average. The SPX, meanwhile, made a run at
the 1,300 level yesterday, but was rebuffed late in the session.
The 1,310 level is the next potential hurdle, while support for the
broad-market index resides near 1,290 - site of its 10-day moving
In equity news, Honeywell International Inc. (
) reported fourth-quarter net income of $369 million, or 47 cents
per share. On a pro forma basis, the company said it earned 87
cents per share, edging past Wall Street's expectations by a penny
per share. Sales rose 12% to $9.04 billion, versus analyst
estimates for $8.84 billion.
Elsewhere, Ford Motor Co. (
) said that its fourth-quarter net income fell to $190 million, or
5 cents per share, from $886 million, or 25 cents a share, in the
year-ago period. Adjusted income came in at 30 cents per share,
missing Wall Street's expectations for 48 cents per share. Ford
said it reduced outstanding automotive debt by more than $1.9
billion during the quarter, and by a total of $14.5 billion in
After the close last night, Microsoft Corp. (
) said its fiscal second-quarter net income fell to $6.63 billion,
or 77 cents per share, as revenue rose to $19.95 billion. Analysts
were expecting earnings of 68 cents per share on $19.2 billion in
revenue. Microsoft said it sold 8 million units of its Xbox Kinect
motion-sensing video game controller, though Windows revenue fell
to $5.1 billion, despite solid sales of the new Windows 7 operating
Finally, Amazon.com Inc. (
) posted a fourth-quarter profit of $416 million, or 91 cents per
share, as sales jumped by 36% to $12.95 billion. Analysts were
expecting earnings of 88 cents per share on revenue of $13 billion.
However, Amazon said that its fourth-quarter operating margins were
3.8%, below the 4.2% Wall Street was looking for. What's more, the
company forecast first-quarter operating income of between $260
million and $385 million, implying a margin range of 2.9% to 3.9%.
The current consensus estimate for first-quarter operating margins
On the earnings front, American Electric Power Co. Inc. (
), Chevron Corp. (CVX), and Oshkosh Corp. (OSK) are slated to
release their quarterly earnings reports today. Keep your browser
for more news as it breaks.
We round out the week today 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
Equity option activity on the CBOE saw 1,455,766 call contracts
traded on Thursday, compared to 820,946 put contracts. The
resultant single-session put/call ratio arrived at 0.56, while the
21-day moving average held at 0.53.
**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 has a bearish slant this morning, with only
four of the 10 foreign indexes that we track in positive territory.
The cumulative average return on the collective stands at a loss of
0.29%. In Asian trading, regional markets folded under the weight
of Standard & Poor's downgrade for Japan, which cut the
country's sovereign debt rating to AA- from AA after the close of
trading yesterday. European stocks are following Asia's lead, with
Sanofi-Aventis spearheading the decline after the company said a
Phase III trial for its breast cancer drug iniparib didn't slow the
progression of the disease or aid in survival rates.
Currencies and Commodities
The U.S. Dollar Index is hovering just above breakeven this
morning, rising 0.04% to 77.76. The greenback continued to edge
higher versus the Japanese yen overnight, providing some lift for
the index. Meanwhile, commodities are mixed in premarket trading.
Crude futures have added 24 cent to $85.88 per barrel, rebounding
from a near two-month low on Thursday. Finally, gold has slipped
$4.80 to $1,315 an ounce in London, with the malleable metal
pressured by a pledge from European Central Bank (ECB) President
Jean-Claude Trichet to keep euro-zone prices at bay.
Unusual Put and Call Activity:
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