The Dow Jones Industrial Average (DJIA) dropped like a rock on
Tuesday, falling 178 points to log its worst day since Aug. 11.
Chinese monetary policy and Ireland's sovereign debt remain front
and center, especially with the European Union (
) and the International Monetary Fund (
) meeting to discuss options for the latter. However, traders
looking for a "dead cat bounce" on Wall Street may be sorely
disappointed, as futures on the DJIA and the S&P 500 Index
(SPX) are trading roughly 3.5 points and 1 point below fair value,
respectively. More domestic economic data is due out later this
morning, with reports on consumer inflation, petroleum supplies,
housing starts, and building permits, but as we saw yesterday, even
positive reports may have little impact if overseas reports worsen.
Look for the DJIA to hold support at 11,000, while the SPX should
see buying emerge near 1,170.
In equity news, General Motors Co. (
) announced that it has increased the number of shares up for sale
in the company's initial public offering (IPO) to 478 million from
365 million. GM cited strong investor demand for the increase,
which could make the stock sale the largest in history. Yesterday,
GM lifted the pricing range to $32 to $33 each from its previous
expectation of $26 to $29. GM also lifted the amount of preferred
stock it plans to sell, to as much as $4.6 billion from $3 billion.
According to the
Wall Street Journal
, if the deal is priced at the top of the range, it would value the
common and preferred stock together at $22.8 billion, exceeding
Agricultural Bank of China's $22.1 billion IPO in July.
Elsewhere, Target Corp. (
) reported that its third-quarter profit rose 23% to $535 million,
or 74 cents per share, from $436 million, or 58 cents per share, a
year earlier. Sales rose 3% to $15.2 billion with comparable sales
increasing 1.6%. Analysts were looking for earnings of 68 cents per
share. Looking ahead, Target said that it expects fourth-quarter
same-store sales to be the best in the past three years.
Also on the retail front, BJ's Wholesale Club Inc. (
) reported a third-quarter profit of $23 million, or 43 cents per
share, as sales climbed nearly 5% to $2.57 billion. Analysts were
looking for earnings of 36 cents per share on sales of $2.57
billion. For the full year, BJ lifted its forecast to a range of
$2.48 to $2.52 per share, above Wall Street's consensus estimate of
$2.47 per share.
On the earnings front, Chico's FAS Inc. (CHS), Suntech Power
Holdings Co. Ltd. (STP), VanceInfo Technologies Inc. (VIT), Applied
Materials Inc. (AMAT), Aruba Networks Inc. (ARUN), Hot Topic Inc.
(HOTT), Limited Brands Inc. (LTD), NetApp Inc. (NTAP), NetEase.com
Inc. (NTES), and PetSmart Inc. (PETM) will release their quarterly
reports today. Keep your browser at
for more news as it breaks.
The usual weekly report on U.S. petroleum supplies will arrive
today, as well as the October consumer price index (CPI), core CPI
reading, October's housing starts, and building permits. The
economic calendar ends the week early tomorrow, with weekly initial
jobless claims, October's leading economic indicators, and
November's Philadelphia Fed manufacturing index.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,568,223 call contracts traded on Tuesday, compared to
1,061,406 put contracts. The resultant single-session put/call
ratio arrived at 0.68, while the 21-day moving average held at
**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
Overseas trading is mixed this morning, with four of the 10
foreign indexes that we track in positive territory. The cumulative
average return on the collective stands at a loss of 0.56%. The
song remains the same in Asia, with regional markets still reeling
from the prospects that Beijing will unveil more tightening
measures. However, a weakening yen bolstered Japanese stocks into
the black. European markets, meanwhile, are trading cautiously
higher, as the region awaits the results of talks between the
European Union and the International Monetary Fund on how to deal
Currencies and Commodities
Focus remains on the U.S. dollar and its strength versus the
euro this morning, as traders await the potential fallout from
Ireland's sovereign debt debacle. At last check, the U.S. Dollar
Index was up fractionally at 79.24. Meanwhile, dollar-denominated
commodities continue to pull back in the face of the greenback's
rally. For instance, crude futures are down 64 cents at $82.20 per
barrel in electronic trading. What's more, gold prices are still
retreating, falling $4.10 to $1,335.30 an ounce in London.
Unusual Put and Call Activity:
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