The Dow Jones Industrial Average (
DJIA
) reclaimed the 11,000 level yesterday, as Wall Street was
encouraged by the Federal Open Market Committee's (
FOMC
) decision to leave interest rates steady at record lows. The Dow
still has plenty of work ahead, as the venerable average is trading
back below stiff resistance at the 11,150 level. This region put up
a considerable fight prior to Tuesday's plunge, and could once
again create turmoil for the Dow. The S&P 500 Index (
SPX
), however, remains below both the 1,200 level and its 20-day
moving average. Heading into the open, it looks like market bulls
are set on challenging these potential short-term hurdles, as
futures on the DJIA and the SPX are trading about 60 points and 7
points above fair value. Finally, options activity on the Chicago
Board Options Exchange (
CBOE
) showed little reaction to Tuesday's plunge. Specifically, the
CBOE single-session equity only put/call volume ratio ticked
slightly higher off its recent lows, but the 21-day moving average
of this ratio remains at its lowest levels since we began tracking
this data in September 2007.
Dominating headlines after the close last night, Hewlett-Packard
Co. (
HPQ
) agreed to buy Palm Inc. (
PALM
) in a deal worth $1.2 billion. Hewlett said that Palm shareholders
will receive $5.70 in cash for each share of common stock. The
boards of both companies have reportedly approved the deal. Shares
of PALM have rocketed more than 26% higher in pre-market trading,
while HPQ is off fractionally.
In earnings news, Proctor & Gamble Co. (
PG
) said its fiscal third-quarter earnings were $2.6 billion, or 83
cents per share, with adjusted earnings coming in at 89 cents per
share. Net sales were up 7% to $19.2 billion. Analysts were looking
for earnings of 81 cents per share on sales of $19.5 billion. The
company raised the low end of its fiscal 2010 profit guidance by 4
cents to a range of $4.06 to $4.12 per share. PG shares have
slipped nearly 2% in pre-market trading, however.
Baidu Inc. (
BIDU
) reported that its first-quarter profit nearly tripled to about
$70.4 million, or roughly $2.02 per share. Excluding one-time
items, earnings came in at about $2.10 per share. Revenue increased
59.6% to $189.6 million. Analysts were looking for a profit of
$1.50 per share. BIDU shares have spiked more than 15% in
electronic trading.
Elsewhere, Visa Inc.'s (
V
) second-quarter profit rose 33% to $713 million, or 96 cents per
share. Revenue jumped 19% to $2 billion. Wall Street was expecting
earnings of 91 cents per share. V shares are off 0.35% in
pre-market trading.
Finally, First Solar (
FSLR
) said that its first-quarter net income rose to $172.3 million, or
$2 per share, as revenue arrived at $568 million. Looking ahead,
the company expects 2010 earnings of $6.80 to $7.30 per share,
including dilution of 9 cents to 10 cents per share for the pending
acquisition of NextLight Renewable Power, LLC. FSLR has jumped more
than 10% in electronic trading.
Earnings Preview
On the earnings front, Aetna Inc. (
AET
), Akeena Solar Inc. (
AKNS
), Colgate-Palmolive Co. (
CL
), ConocoPhillips (
COP
), Eastman Kodak Co. (
EK
), Exxon Mobil Corp. (
XOM
), Fortune Brands Inc. (
FO
), Kellogg Co. (
K
), Motorola Inc. (
MOT
), OfficeMax Inc. (
OMX
), Potash Corp. of Saskatchewan (
POT
), Chiquita Brands International Inc. (
CQB
), KLA-Tencor Corp. (
KLAC
), McAfee Inc. (
MFE
), and MEMC Electronic Materials Inc. (
WFR
) are slated to release their quarterly earnings reports. Keep your
browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
Market Statistics
Equity option activity on the Chicago Board Options Exchange (
CBOE
) saw 1,733,098 call contracts traded on Wednesday, compared to
917,543 put contracts. The resultant single-session put/call ratio
arrived at 0.53, while the 21-day moving average held at 0.48.
**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.**
Every morning, our research staff analyzes the prior day and
the overnight markets, and monitors the morning wires to give you
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Overseas Trading
Overseas trading is mixed this morning, as six of the 10 foreign
indexes that we track are in positive territory. The cumulative
average return on the collective stands at a gain of 0.17%. Asian
markets finished mixed on Thursday, with banking and metals stocks
leading the decline as Europe's sovereign debt issues continued to
weigh on investors. Across the pond in Europe, regional indexes
moved higher, as Siemens and Unilever provided a boost for
sentiment after reporting solid quarterly earnings. On the economic
front, the European Commission's economic sentiment indicator for
the euro zone showed a rise to 100.6 in April from a reading of
97.9 in March. Overseas market information comes to you courtesy of
Schaeffer's Daily Bulletin
.
Currencies and Commodities
The U.S. dollar was once again beaten down in Asian trading in
favor of the higher-yielding Japanese yen, but the greenback is
making a comeback in European trading, as the euro continues to
struggle in Greece's shadow. Still, while it has rebounded from its
early morning lows, the U.S. Dollar Index is still down by about
0.35% at 82.03. Surprisingly, gold futures, which usually trade
inversely to the dollar, are also weak this morning. Specifically,
gold is down $4 at $1,167.80 an ounce in London. Finally, crude
futures have rebounded in electronic trading this morning, rallying
85 cent to $84.07 per barrel.
Unusual Put and Call Activity:
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Education Center
topics on
Option Volume
and
Open Interest Configurations
.
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