The Dow Jones Industrial Average (DJIA) retreated roughly 22
points on Friday, as investors debated December's employment data.
Unfortunately for Wall Street bulls, European debt concerns have
U.S. stocks headed for losses once again this morning, following
reports that Portugal is being pressured to accept a bailout. In
fact, futures on the DJIA and the S&P 500 Index (SPX) are
trading roughly 48 points and 7.5 points below fair value,
respectively. The losses have set a sour backdrop for Alcoa Inc. (
), which kicks off the start to the 2010 fourth-quarter earnings
season after the close of trading this afternoon.
Technically, the DJIA telegraphed its support and resistance levels
on Friday, fluctuating between 11,600 and 11,750. Additional
support may be found in the 11,550 region, which is currently home
to the Dow's 20-day moving average. The SPX logged a similar
performance on Friday, with support emerging near 1,260, while
resistance held firm at 1,275. The 1,255 level should provide
additional support, if selling pressure takes hold.
In earnings news, Alcoa is expected to post a profit of 19 cents
per share in the most recent quarter, up sharply from a profit of
just a penny per share in the same quarter last year. Historically,
the company has topped expectations in two of the prior four
reporting periods, missing in the first and second quarters of
2010. As a result, the company has an average downside surprise of
roughly 9.6% during this time frame.
In equity news, Credit Suisse upgraded Vodafone Group PLC (
) to "outperform" from "neutral." In a note to clients, Credit
Suisse said that gaining the iPhone in Germany and the U.S. could
allow the company to outperform its peers and return to growth in
Europe in the fourth quarter. The broker cautioned, however, that
U.S. margins are expected to fall.
Elsewhere, BP plc (
) dropped more than 2% in European trading following the shutdown
of the Trans-Alaska Pipeline System due to a pumping station leak.
The closure has forced oil companies, including BP, which has a 47%
stake in the pipeline, to halt 95% of production from the North
Finally, LDK Solar Co. (
) lifted its fourth-quarter revenue and gross margin estimates last
night. The company now sees revenue at $870 million to $910
million, up from prior forecasts of $710 million to $750 million.
Gross margin should come in at 25% to 27%, compared with LDK's
previous expectation of 24% to 26%. Analysts are looking for
revenue of $728 million for the quarter.
On the earnings front, Alcoa Inc. (
) will be joined by Helen of Troy Ltd. (
), Apollo Group Inc. (APOL), and WD-40 Company (WDFC). Keep your
for more news as it breaks.
There are no major economic reports scheduled for release today,
while tomorrow offers up November's wholesale inventories. On
Wednesday, the Fed will release its Beige Book for January, while
the weekly report on U.S. petroleum supplies will also hit the
Street. Thursday offers up the weekly report on initial jobless
claims as well as December's producer price index, while Friday
rounds out the week with December's consumer price index, retail
sales figures, and industrial production numbers.
Equity option activity on the CBOE saw 1,770,738 call contracts
traded on Friday, compared to 891,224 put contracts. The resultant
single-session put/call ratio arrived at 0.50, 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
The winter 2011 issue of
magazine is now available here.
Overseas trading is in trouble this morning, with only one of
the 10 foreign indexes that we track in positive territory. The
cumulative average return on the collective stands at a loss of
0.95%. In Asia, stocks headed broadly lower on concerns that
Beijing would tighten its property and monetary policies once
again. Pressure was also derived from a weak showing in U.S. jobs
data on Friday. Across the pond in Europe, banks are leading a
steep retreat, as sovereign debt concerns resurfaced following
speculation that Portugal is under pressure to take a bailout.
Currencies and Commodities
News of the shutdown of the Trans-Alaska Pipeline over the
weekend raised concerns about a short-term disruption in U.S. oil
supplies, sending crude futures higher in overnight trading.
Heading into the open this morning, crude futures are up 62 cents
at $81.13 per barrel, despite a rise in the U.S. dollar. Speaking
of the greenback, the U.S. Dollar Index has risen 0.14% to 81.13 in
premarket trading. Finally, gold is struggling to make headway this
morning, with the most active futures contract down 80 cents at
$1,368.10 an ounce in London.
Unusual Put and Call Activity:
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