The Dow Jones Industrial Average (DJIA) is poised to extend
yesterday's 68-point rebound this morning, with Wall Street's
economic optimism underpinned by solid corporate earnings.
Construction spending and manufacturing data are due out today, as
traders prepare for a wave of jobs data that begins tomorrow.
Meanwhile, the earnings deluge continues today, with Pfizer Inc. (
) and United Parcel Service Inc. (
) among those firms likely to garner considerable attention.
Heading into the open, futures on the DJIA and the S&P 500
Index (SPX) are trading roughly 28 points and 6.88 points above
fair value, respectively.
Technically, the DJIA has rallied back to challenge potential
resistance at the 11,900 level (home to the Dow's 10-day moving
average), though this hurdle could fall in early trading this
morning. Support for the DJIA resides at 11,800, while resistance
remains at 12,000. The SPX, meanwhile, reclaimed its 20-day moving
average yesterday, and could push back above its 10-day trendline
later this morning. Look for the broad-market index to hold support
at 1,280, with resistance in the 1,290-1,295 area. Finally,
investor pessimism is rising again among options traders, as the
21-day moving average of the CBOE equity-only, single-session
put/call ratio has risen to a nearly seven-week high of 0.54.
In earnings news, Cummins Engine Inc. (
) reported that its fourth-quarter earnings rose 34% to $362
million, or $1.84 per share, as sales climbed 22% to $4.14 billion.
Analysts were looking for earnings of $1.69 per share on sales of
$3.9 billion. "Given our strong balance sheet, the expected
recovery of our North American markets and the global growth
opportunities in front of us, we are forecasting further
significant growth in 2011 and beyond," said Chairman and Chief
Executive Tim Solso.
Elsewhere, BP plc (
) said that its fourth-quarter net profit rose 30% to $5.57 billion
and that it plans to resume paying a quarterly dividend. Revenue
rose 14% to $83.99 billion. The company said its fourth-quarter
results included a $1 billion pretax charge related to the Gulf of
Mexico oil spill. The company also said that it plans to sell its
Texas City and Carson refineries in the U.S.
Finally, Baidu Inc. (
) announced that its fourth-quarter net income rose sharply to 1.16
billion yuan ($175.6 million), or 3.32 yuan per American depositary
share. Revenue rose 94% to 2.45 billion yuan ($370.9 million).
Excluding items, Baidu said earnings for the period were 3.40 yuan,
or 52 cents per depositary share. Analysts had expected Baidu to
post earnings of 47 cents per depositary share.
On the earnings front, Pfizer Inc. (
), United Parcel Service Inc. (
), Boston Scientific Corp. (BSX), Broadcom Corp. (BRCM), Electronic
Arts Inc. (ERTS), and MEMC Electronic Materials Inc. (WFR) are
slated to release their quarterly earnings reports today. Keep your
for more news as it breaks.
The economic calendar offers up December's construction
spending, January's Institute for Supply Management (ISM)
manufacturing index, and January's auto sales figures today.
Tomorrow, the weekly report on U.S. petroleum supplies will be
joined by the Challenger Gray & Christmas report on planned
corporate layoffs, and ADP's private sector employment for January.
Weekly initial jobless claims arrive on Thursday, followed by
December's factory orders and the ISM services index for January.
We round out the week with a bang, as the Labor Department will
release the January nonfarm payrolls report and the unemployment
Equity option activity on the CBOE saw 1,245,689 call contracts
traded on Monday, compared to 761,346 put contracts. The resultant
single-session put/call ratio arrived at 0.61, while the 21-day
moving average rose to 0.54 - its highest reading since Dec. 15,
**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 bouncing back this morning, as eight of the
10 foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a gain of
0.24%. Asian markets headed mostly higher, though trading in China
was choppy ahead of this week's Lunar New Year holiday. Mixed
manufacturing data out of Beijing also complicated matters, as
China's official purchasing managers' index fell to 52.9 in
January. European stocks are also trading higher, as Egyptian
concerns took a back seat to gains in the metals and mining
Currencies and Commodities
The U.S. Dollar Index is headed lower once again this morning,
as investors turn toward the equities market for higher returns on
riskier investments. Heading into the open, the index is down 0.49%
at 77.36. Crude futures are also heading lower this morning, as
Egyptian concerns subside. Currently, the most active crude
contract is down 70 cents at $91.49 per barrel. Finally, gold
futures are edging higher, rising $3.80 to $1,338.30 an ounce in
Unusual Put and Call Activity:
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