The Dow Jones Industrial Average (DJIA) rallied more than 80
points on Monday, as traders prepared for today's earnings barrage.
However, it doesn't look like the bulls will be able to retain any
of yesterday's gains, as futures on the DJIA and the S&P 500
Index (SPX) are trading roughly 72 points and 10 points below fair
value, respectively. Apple Inc.'s (
) conservative outlook set the tone after the close last night,
stealing much of Wall Street's thunder heading into the open this
morning. What's more, the Dow must digest earnings reports from
components IBM Corp. (
), Bank of America Corp. (
), Johnson & Johnson (
), and Coca-Cola Co. (
). And if that wasn't enough, September housing starts and building
permits are also on tap today. Look for the DJIA to hold near
11,000, with additional support manifesting at 10,900, which is
home to the Dow's 20-day moving average. The SPX, meanwhile, should
find a floor near 1,170.
Ahead of the open, Bank of America Corp. posted a third-quarter
net loss of $7.3 billion, or 77 cents per share. The bank saw a net
loss applicable to common shareholders of $7.6 billion. Excluding a
goodwill impairment charge of $10.4 billion, the banking giant said
it earned $3.1 billion, or 27 cents per share in the quarter.
Analysts were looking for earnings of 18 cents per share.
After the close last night, Apple Inc. reported net income of
$4.31 billion, or $4.64 per share, as revenue jumped 67% to $20.34
billion. Analysts were expecting earnings of $4.10 per share on
revenue of $18.9 billion. Looking ahead, Apple forecast
fourth-quarter earnings of $4.80 per share on revenue of $23
billion, compared to Wall Street's expectations for earnings of
$5.03 per share on revenue of $22.35 billion. iPad sales were also
weaker than expected, with Apple selling nearly 4.2 million iPads,
compared to forecasts for sales of about 4.8 million.
IBM Corp. said that its third-quarter net income rose to $3.6
billion, or $2.82 per share, as revenue rose 3% to $24.3 billion.
Analysts had expected IBM to report third-quarter earnings of $2.76
per share on $24.2 billion in revenue.
VMware Inc. (VMW) reported a third-quarter profit of $84.6
million, or 20 cents per share, on revenue of $714.2 million.
Adjusted income was 39 cents per share. Analysts had expected
earnings of 35 cents per share, on revenue of $699 million.
On the earnings front, EMC Corp. (EMC), Goldman Sachs Group Inc.
(GS), Harley-Davidson Inc. (HOG), The New York Times Co. (NYT),
UnitedHealth Group Inc. (UNH), Boston Scientific Corp. (BSX),
Juniper Networks Inc. (JNPR), SLM Corp. (SLM), and Yahoo! Inc.
(YHOO) will release their quarterly reports today. Keep your
for more news as it breaks.
The Commerce Department offers up September housing starts and
building permits today, while tomorrow sports the usual weekly
report on U.S. petroleum supplies and the Fed's Beige Book for
October. Thursday bring the Labor Department's weekly new jobless
claims figures, while the Conference Board will report on September
leading indicators, and the Philadelphia Fed will provide a look at
manufacturing data. We end the week on a quiet note, as there are
no major economic reports scheduled for Friday.
Equity option activity on the CBOE saw 1,548,036 call contracts
traded on Monday, compared to 873,513 put contracts. The resultant
single-session put/call ratio arrived at 0.56, while the 21-day
moving average held at 0.58.
**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
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Overseas trading is divided this morning, as half of the 10
foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a gain of
0.23%. In Asian trading, regional indexes finished mostly higher,
as banks garnered strength from Citigroup Inc.'s (C)
better-than-expected report. In China, the People's Bank of China
lifted its deposit and lending rates by a quarter point, according
to the official Xinhua news agency. Turning to Europe, the banking
sector is also front and center, with traders focusing heavily on
earnings reports from Citigroup and Bank of America Corp. However,
despite lift from banks, regional indexes are trading mostly
Currencies and Commodities
A continued rally in the U.S. dollar is taking its toll on
commodities this morning. The U.S. Dollar Index has added 0.7% to
trade at 77.47, placing the index firmly above its 10-day moving
average. Crude futures are taking the greenback's rally pretty
hard, with the front-month contract falling nearly 1% to $82.97 per
barrel. Gold futures are also retreating in the face of the
dollar's rebound. The December gold contract was last seen lower by
$4.70 at $1,367.40 an ounce in London.
Unusual Put and Call Activity:
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