The Dow Jones Industrial Average (DJIA) slipped fractionally
lower on Monday, failing to follow the S&P 500 Index (SPX) and
Nasdaq Composite (COMP) higher. Some of yesterday's tensions have
been relieved, with rhetoric on the Korean peninsula returning to
normal, but a downgrade warning for Portugal from Moody's Investor
Services could create a fresh point of concern this morning.
Heading into the open, futures on the DJIA and the SPX are trading
roughly 22 points and 3 points above fair value, respectively. Look
for the Dow to find support at 11,400-11,450, with resistance at
11,500-11,520. The SPX, meanwhile, has resistance at 1,250, and
support at 1,240.
Checking in with the CBOE Market Volatility Index (VIX), we find
that the so-called "fear" index rebounded from its 2010 lows near
the 16 level on Monday. The index has fallen more than 31% since
peaking at 23.84 on Nov. 29, and has plunged a hefty 66% since its
May 21 perch at 48.20. On one hand, a low VIX means that portfolio
insurance is relatively inexpensive at the moment. On the other
hand, with the index trading more than 25% below its 120-month (or
10-year) moving average, there is some concern that volatility
could be poised for a mean-reversion rally.
In equity news, Adobe Systems Inc. (
) reported a fourth-quarter profit of $268.9 million, or 53 cents
per share. On a non-GAAP basis, the company earned $285.7 million,
or 56 cents per share, for the recent period. Revenue grew 33% to
$1 billion. Analysts were expecting earnings of 52 cents per share
on revenue of $988 million.
Also, Jabil Circuit Inc. (
) said that it earned a first-quarter profit of $106.7 million, or
49 cents per share, on revenue of $4.1 billion. Excluding one-time
items, Jabil earned $132.1 million, or 61 cents per share. Wall
Street was looking for a profit of 55 cents per share on $3.97
On the earnings front, CarMax Inc. (
), ConAgra Foods Inc. (
), Hovnanian Enterprises Inc. (
), Nike Inc. (NKE), Red Hat Inc. (RHT), Tibco Software Inc. (TIBX),
and Cintas Corp. (CTAS) are slated to release their quarterly
reports. 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 latest estimate on third-quarter gross
domestic product, November's existing home sales, and the weekly
report on U.S. petroleum supplies. The Commerce Department will
report on personal income and spending, durable goods orders, and
new home sales for November on Thursday, while the market will be
closed for the Christmas holiday on Friday.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,414,644 call contracts traded on Monday, compared to
808,226 put contracts. The resultant single-session put/call ratio
arrived at 0.57 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
Overseas trading looks strong this morning, as all 10 foreign
indexes that we track are in positive territory. The cumulative
average return on the collective stands at a gain of 1.01%. Asian
markets headed broadly higher, with stocks enjoying a relief rally
after tensions eased on the Korean peninsula. Early in the
overnight session, the Bank of Japan left its policy rates and
economic assessment unchanged. Across the pond in Europe, regional
markets are headed for their second consecutive winning session.
Stocks are following Asia's lead higher, despite a warning from
Moody's Investor Services that the firm may downgrade Portugal's
Currencies and Commodities
The U.S. dollar is trading lower versus its major foreign
competitors this morning, as supportive comments out of Beijing
have helped provide lift for the euro. Specifically, comments from
Chinese Vice Premier Wang Qishan indicated that China backed
Europe's efforts to stabilize global markets. At last check, the
U.S. Dollar Index was off 0.2% at 80.47. Crude futures have failed
to take advantage of the greenback's weakness, with the most active
contract up a mere 2 cents at $89.39 per barrel. Finally, gold
futures are also hovering close to breakeven, rising 80 cents to
$1,386.90 an ounce in London.
Unusual Put and Call Activity:
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