The Dow Jones Industrial Average (DJIA) could be headed lower in
early trading this morning, as Wall Street prepares for another
round of U.S. employment data while keeping an eye toward unrest in
Egypt. Specifically, futures on the DJIA and the S&P 500 Index
(SPX) are trading roughly 18 points and 2.6 points below fair
value, respectively. Also on tap this morning is the Institute for
Supply Management's services index, and January's factory orders.
Merck & Co. (
) is providing a bit of drag for the blue chip sector in premarket
trading, with shares down more than 1% after the company said it
swung to a fourth-quarter loss.
Technically, the DJIA slogged through a relatively uneventful
session on Wednesday to log its third consecutive winning session.
On a short-term basis, the Dow has resistance at the 12,050 level
and support at the key 12,000 region. Pulling back, longer-term
support lies in the 11,850 area, which is home to the DJIA's 20-day
moving average. As for the SPX, the broad-market index held above
the 1,300 level for the second session in a row yesterday, though,
given futures activity heading into the open, the index may be hard
pressed to hold this psychologically significant region. Below
1,300, the 1,290 area should provide a solid floor for the SPX,
while resistance should manifest at the 1,320 level.
In earnings news, Merck & Co. (
) lost $531 million, or 17 cents per share, in the fourth quarter,
down from a profit of $6.94 billion, or $2.35 per share, last year.
Sales rose 20% to $12.1 billion from $10.1 billion. Excluding
one-time items, Merck earned 88 cents per share in the quarter.
Wall Street was looking for earnings of 83 cents per share on sales
of $11.55 billion.
Elsewhere, Dow Chemical Co. (
) reported that its fourth-quarter net profit rose to $511 million,
or 37 cents per share, from $172 million, or 8 cents per share, in
the same period a year ago. Adjusted earnings increased to 47 cents
per share from 18 cents per share. Analysts were expecting a profit
of 34 cents per share. Revenue for the quarter rose to $13.77
billion from $12.47 billion.
Finally, BJ's Wholesale Club Inc. (
) announced that it is considering putting the company up for sale
as part of its move to explore strategic alternatives. A committee
of independent directors hired Morgan Stanley as an advisor. BJ's
has set no date for a decision on the process. Separately, the
company reported that January same-store sales rose 0.3%, excluding
gasoline sales. Wall Street was expecting same-store sales to
increase by 0.8%, excluding gasoline.
On the earnings front, AutoNation Inc. (
), The Estee Lauder Companies Inc. (
), International Paper Company (IP), Kellogg Company (K),
MasterCard Inc. (MA), Las Vegas Sands Corp. (LVS), and Sunoco Inc.
(SUN) are slated to release their quarterly earnings reports today.
Keep your browser at
for more news as it breaks.
Weekly initial jobless claims arrive today, followed by
December's factory orders and the Institute for Supply Management's
services index for January. We round out the week with a bang
tomorrow, as the Labor Department will release the January nonfarm
payrolls report and the unemployment rate.
Equity option activity on the CBOE saw 1,602,730 call contracts
traded on Wednesday, compared to 739,602 put contracts. The
resultant single-session put/call ratio arrived at 0.46, while the
21-day moving average held at 0.53.
**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.
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Overseas trading is in rough shape this morning, as only two of
the 10 foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a loss of
0.06%. Disappointing earnings results from blue-chip electronics
firms pulled stocks broadly lower in Japan, while India's Sensex
rebounded from recent steep losses. Volume was relatively light,
however, as markets in China, Hong Kong, South Korea, Taiwan,
Singapore, Malaysia, Indonesia, and Vietnam were shut for the Lunar
New Year holidays. Earnings concerns are also a catalyst for
selling pressure in Europe, with Royal Dutch Shell plc dragging the
commodities sector lower, while Deutsche Bank AG provided lift for
Currencies and Commodities
Continuing unrest in Egypt is driving safe-haven demand for the
U.S. dollar this morning. At last check, the U.S. Dollar Index was
higher by 0.19% at 77.31. The situation is also driving crude
prices higher, with analysts claiming that a "risk premium" is
being baked into oil prices. In electronic trading, the March crude
futures contract has added 66 cents to trade at $91.52 per barrel.
Finally, gold is losing its edge as inflation concerns and a rising
U.S. dollar take their toll. In London, gold futures have added a
mere $1.00 to hover at $1,333.10 an ounce.
Unusual Put and Call Activity:
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