The Dow Jones Industrial Average (DJIA) backed away from
challenging its 2010 highs on Thursday, as earnings-induced
enthusiasm faded quickly. While heavyweights such as American
Express Co. (
), Amazon.com Inc. (
), and Verizon Communications Inc. (
) have released their quarterly reports already, Wall Street is
transfixed by the Group of 20 (G-20) finance ministers meeting
taking place in Seoul, South Korea. In fact, futures on the DJIA
and the S&P 500 Index (SPX) are trading flat when compared with
fair value, indicating that investors are unwilling to take up firm
positions ahead of the outcome of this meeting. With the G-20 not
coming to a close until tomorrow, we could be in for a rather tight
trading range on the Street today. Look for the DJIA to struggle
with resistance at 11,150 and 11,200, while maintaining support at
11,050-11,000. As for the SPX, the broad-market index should remain
between 1,170 and 1,190.
In earnings news, Dow component Verizon Communications Inc. is
trading fractionally lower in premarket trading, after the company
said that its third-quarter earnings fell 25% to $881 million, or
31 cents per share, as revenue slipped 2.9% to $26.5 billion.
Excluding one-time items, Verizon would have earned 56 cents per
share. Analysts were looking for earnings of 54 cents per
Fellow Dow member American Express Co. is also trading
fractionally lower ahead of the open, after the company announced
last night that its third-quarter net income came in at $1.1
billion, or 90 cents per share, as revenue rose 17% to $7 billion.
Wall Street was looking for earnings of 85 cents per share.
Outside the blue chip sector, Amazon.com Inc. announced
quarterly net income of $231 million, or 51 cents per share, on
revenue that rose 39% to $7.56 billion. Analysts were expecting
earnings of 48 cents per share on revenue of $7.37 billion.
However, AMZN was last seen lower by roughly 3.5% in electronic
trading, as investors pan the company's forecast for fourth-quarter
operating-margin of 3% to 4.2%. Wall Street had been expecting
fourth-quarter operating margins of 5%.
On the earnings front, Honeywell International Inc. (
), KeyCorp (
), and Schlumberger Limited (SLB) will release their quarterly
reports today. Keep your browser at
for more news as it breaks.
We end the week on a quiet note, as there are no major economic
reports scheduled for release today. Looking ahead to next week,
September's existing home sales arrive on Monday, while the
Case-Shiller home price index for August and October's consumer
confidence index are on tap for Tuesday. On Wednesday, September's
durable goods orders, September's new home sales, and the weekly
report on U.S. petroleum supplies are slated for release. Thursday
offers up the usual report on weekly initial jobless claims, while
Friday rounds out the week with an advance look at third-quarter
gross domestic product, October's Chicago purchasing managers'
index, and the final reading for the October University of Michigan
consumer sentiment index.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,157,722 call contracts traded on Thursday, compared to
837,252 put contracts. The resultant single-session put/call ratio
arrived at 0.72, while the 21-day moving average held at 0.59.
**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
Overseas trading is in poor shape this morning, as only three of
the 10 foreign indexes that we track are in positive territory. The
cumulative average return rests at a gain of 0.01%. Across the
globe, trading is cautious, though with a negative bias, as
investors grow anxious ahead of the results of the current G-20
finance ministers meeting. In Asia, regional markets finished mixed
due largely to currency tensions. However, technology stocks were
strong in the wake of well-received earnings from LG Display Co. in
Seoul. Across the pond in Europe, indexes are trading flat to
lower, as early gains derived from strong corporate earnings have
faded heading into midday trading.
Currencies and Commodities
The short trade on the U.S. dollar is weakening this morning, as
traders reconsider their positions ahead of the outcome of the G-20
meeting. Along currency lines, U.S. Treasury Secretary Timothy
Geithner said that countries should "commit to refrain from
exchange-rate policies designed to achieve competitive advantage by
either weakening their currency or preventing appreciation of an
undervalued currency." At last check, the greenback was trading
mostly higher versus its foreign competitors, even though the U.S.
Dollar Index has added a mere 0.07% to trade at 77.48. Of note, the
dollar was last seen hovering just above a 15-year nadir versus the
Predictably, gold futures are lower as the dollar rises, with
the December contract off $5.50 at $1,320.10 an ounce in London.
Crude futures, however, are headed higher despite the dollar's
strength. In fact, the front-month crude contract has added 54
cents to trade at $81.10 per barrel.
Unusual Put and Call Activity:
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