The Dow Jones Industrial Average (DJIA) rebounded from support
at its 20-day moving average to reclaim the psychologically
important 11,000 level on Wednesday, as Wall Street cheered a round
of positive corporate earnings reports. Looking at premarket
activity this morning, we may be headed toward a repeat
performance, as futures on the DJIA and the S&P 500 Index (SPX)
are trading roughly 72 points and 6.8 points above fair value,
respectively. Dow components Caterpillar Inc. (
CAT
) and Travelers Companies Inc. (
TRV
) have set a bullish tone for the Street this morning, while
traders await the latest jobless claims data, September's leading
economic indicators, and the Philly Fed's manufacturing index. Look
for the DJIA to hold support near 11,050, with resistance in the
11,150-11,200 region. As for the SPX, the broad market index should
continue to trade between 1,165 and 1,185.
In earnings news, Caterpillar Inc. (
CAT
) said its third-quarter profit jumped 96% to $792 million, or
$1.22 per share, from $404 million, or 64 cents per share, in the
year-ago period. Sales rose 53% to $11.13 billion. Wall Street
analysts expected earnings of $1.09 per share and revenue of $10.5
billion. Looking ahead, CAT boosted its 2010 profit outlook to a
range of $3.80 per share to $4 per share. "2010 is shaping up to be
one of the most significant year-over-year increases in sales and
revenues in our history," the company said. Analysts expected
earnings of $3.76 per share for 2010.
Elsewhere, Travelers Companies Inc. (
TRV
) reported third-quarter net profit of $1.01 billion, or $2.11 per
share, compared to $935 million, or $1.65 per share, in the same
period a year ago. Travelers said that it sees 2010 operating
income of $5.75 to $5.95 per share, up from its previous range of
$5.20 to $5.45 per share.
EBay (
EBAY
) reported non-GAAP earnings of $531 million, or 40 cents per
share. Revenue rose 1% to $2.25 billion. Analysts were expecting
earnings of 37 cents per share on revenue of $2.18 billion.
Netflix (
NFLX
) announced that its third-quarter profit jumped 26% as the
company's streaming service gathered further momentum. The company
noted that in the fourth quarter, a majority of its subscribers
will watch more streamed content as opposed to DVD. Excluding
items, Netflix said it earned $42.2 million, or 78 cents per share,
in the latest three months. Sales rose to $553.2 million from
$423.1 million. Analysts expected a profit of 71 cents per share on
sales of $549.7 million.
Earnings Preview
On the earnings front, AT&T Inc. (
T
), Freeport-McMoran Copper & Gold Inc. (FCX), Fifth Third
Bancorp (FITB), Huntington Bancshares Inc. (HBAN), ITT Educational
Services Inc. (ESI), PNC Financial Services (PNC), United Parcel
Service Inc. (UPS), Xerox Corp. (XRX), Amazon.com Inc. (AMZN),
American Express Co. (AXP), Capital One Financial Corp. (COF), and
SanDisk Corp. (SNDK) will release their quarterly reports today.
Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The Labor Department's weekly initial jobless claims figures are
on tap today, alongside the Conference Board's September leading
indicators, and the Philadelphia Fed's manufacturing index. We end
the week on a quiet note, as there are no major economic reports
scheduled for Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,298,649 call contracts traded on Wednesday, compared
to 897,683 put contracts. The resultant single-session put/call
ratio arrived at 0.69, 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
higher.**
Overseas Trading
Overseas trading looks strong this morning, as seven of the 10
foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a gain of
0.60%. Asian markets finished mixed, with Hong Kong insurers
rallying on expectations that Beijing's interest rate increase will
improve their investment returns. However, mainland China was in
retreat following news that the country's third-quarter gross
domestic product rose 9.6% from the same period a year earlier,
slowing from 10.3% growth rate in the second quarter. Across the
pond in Europe, regional indexes are trading broadly higher in the
wake of strong earnings from Nokia Corp. (NOK), Fiat, and Pernod
Ricard.
Currencies and Commodities
A rebound in the U.S. dollar in Asian trading and concerns about
a slip in China's economy are pressuring crude futures this
morning. At last check, the front-month contract was down 22 cents
at $82.32 per barrel. However, while the greenback is up versus the
Japanese yen, the euro is holding firm. In fact, the U.S. Dollar
Index is off 0.30% in premarket trading, as the greenback declines
versus most of its foreign competitors. Finally, gold futures are
edging higher in London, gaining $2.80 to trade at $1,347 per
barrel.
Unusual Put and Call Activity:
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and
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