The Dow Jones Industrial Average (DJIA) rallied to a 25-month
peak on Tuesday, as the Street reacted to a promising report from
the retail sector. However, with little in the way of earnings or
economic news on tap for today, the question now becomes whether
the blue chip barometer can continue its momentum. Futures are
pointing to slight gains this morning, with Dow futures currently
trading 13 points above fair value. Meanwhile, futures on the
S&P 500 Index (SPX) are trading 2.5 points above fair value.
Despite a modest pullback on Tuesday morning, the Dow held steady
above short-term support at the 11,550 level, rallying as high as
11,591 in afternoon trading. Adding additional technical support
for the blue chip barometer is its 10-day trendline, which is
located just above 11,500, and has supported the Dow since the
start of December. Meanwhile, resistance lies at the 11,600 level
for the Dow. However, let's not forget about the SPX, which also
touched a new 25-month peak yesterday. In fact, the SPX rallied as
high as 1,259 on Tuesday before retreating beneath resistance from
the 1,260 level.
In equities news, insurance issue The Allstate Corporation (
) has sued Bank of America Corporation (
) and its Countrywide Financial unit over a $700 million investment
ALL made in residential mortgage-backed securities. ALL claims that
Countrywide misrepresented the risk on the investments.
Meanwhile, SAP AG (
) was ordered by a federal judge to pay interest on a $1.3 billion
award that Oracle Corporation (
) won against it in a November copyright infringement trial -- but
not in the amount ORCL had originally asked for. On Tuesday, the
judge denied ORCL's proposed interest calculation, but established
a method for repayment using an average of historical Treasury
Elsewhere, bakery behemoth Sara Lee Corp. (
) has agreed to sell its White King and Janola businesses to Symex
Holdings Ltd for a cool $50 million. The businesses develop bleach
and cleaning products for Australia and New Zealand, and generated
roughly $28 million in 2009. SLE is hoping to close the deal during
the first quarter.
There are no major earning reports currently scheduled. Keep
your browser at
for more news as it breaks.
Today, we'll get the Energy Information Administration's weekly
report on crude inventories.
(Editor's note: The original post of this article
inadvertently included all option activity on the CBOE in this
section , rather than equity-only activity.)
Equity option activity on the CBOE saw 872,090 call contracts
traded on Tuesday, compared to 485,755 put contracts. The resultant
single-session put/call ratio arrived at 0.56, while the 21-day
moving average held at 0.51.
**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 of the
foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a gain of
0.71%. In Asia, stocks ended higher on Wednesday, as investors
looked past China's recent interest rate increase and instead
focused on banks and commodities. In fact, while the U.S. markets
enjoyed fresh highs on Tuesday, analysts predict that the markets
in Hong Kong and Shanghai will likely enjoy similar rallies in
2011. Elsewhere, Australia's market reopened following the extended
Christmas holiday. Across the pond, European markets were mixed in
the first post-holiday session.
Currencies and Commodities
Despite Tuesday's disappointing consumer confidence and home
sales reports, crude futures remain largely unchanged this morning.
The Street is now focused on the weekly U.S. oil inventory report,
with crude stockpiles expected to fall by 2.8 million barrels in
the week ending Dec. 24. At last check, crude futures had
backpedaled slightly this morning, shedding 0.5% to $91.06 per
barrel. Meanwhile, the dollar has slumped 0.1% to sit at $80.26,
while gold futures have slipped 0.1% to trade at $1,403.60 an ounce
Unusual Put and Call Activity:
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