The Dow Jones Industrial Average (DJIA) has done little but
consolidate since Monday's spike higher, but a weakening purchasing
managers' index (
) out of the euro zone has provided Wall Street with a reason to
sell this morning. Futures on the DJIA and the S&P 500 Index
(SPX) are trading some 60 points and 6.7 points below fair value,
respectively. Given that the 14-day Relative Strength Indexes on
the DJIA and the SPX came close to "overbought" territory on
Monday, a bit of profit taking should also be expected. That said,
support for the blue chip barometer still resides in the 10,700
level, while the SPX should find a cushion near 1,130. On a final
note, the 21-day moving average of the Chicago Board Options
) single-session equity-only put/call ratio tagged its lowest
reading since May 14 on Tuesday, rebounding off that low
In equity news, Blockbuster Inc. (BLOKA) filed for Chapter 11
bankruptcy protection after agreeing to a deal with bondholders to
recapitalize the company. Blockbuster said the filing applies to
the company and its domestic subsidiaries, but not to non-U.S.
operations or the group's franchisees. The agreement will reduce
its indebtedness to around $100 million from the current level of
nearly $1 billion. The company said that all 3,000 U.S. stores will
remain open, but that it will "evaluate its U.S. store
Elsewhere, McDonald's Corp. (
) is increasing its quarterly cash dividend by 11% to 61 cents per
share. "With today's announced dividend increase, we expect the
2010 total cash returned to shareholders to be approximately $5
billion, split between dividends and share repurchases," said Chief
Executive Jim Skinner. The dividend will be paid on Dec. 15 to
shareholders of record at the close of business on Dec. 1.
In earnings news, Red Hat Inc. (
) reported fiscal second-quarter net income, excluding items, of 19
cents per share, as revenue rose 20% to $219.8 million. Analysts
had expected Red Hat to report earnings of 18 cents per share, and
$211.5 million in revenue.
Bed Bath & Beyond Inc. (
) said its second-quarter profit rose to $181.6 million, or 70
cents per share, with revenue increasing to $2.14 billion. Analysts
estimated a quarterly profit of 63 cents per share on revenue of
On the earnings front, Rite Aid Corp. (
), Nike Inc. (
), and Saba Software Inc. (
) are slated to release their quarterly earnings reports today.
Keep your browser at
for more news as it breaks.
The report on weekly initial jobless claims will be accompanied
by August's existing home sales and leading indicators today.
Rounding out the week, durable goods orders for August and new
homes sales for August are on tap on Friday.
Equity option activity on the Chicago Board Options Exchange (
) saw 1,037,409 call contracts traded on Wednesday, compared to
750,822 put contracts. The resultant single-session put/call ratio
arrived at 0.72, while the 21-day moving average rose to 0.60.
**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 awfully quiet this morning, as markets in
Japan, China, South Korea, and Hong Kong are closed for a holiday.
As a result, none of the 10 foreign indexes that we track are in
positive territory. The cumulative average return on the collective
stands at a loss of 0.55%. With most of Asia on vacation, attention
fell squarely on Europe and the region's weaker-than-expected
purchasing managers' index. Specifically, the Markit composite PMI
index fell to 53.8 from 56.2 in August, giving investors a reason
to sell across the board.
Currencies and Commodities
Safe-haven buying is providing lift for the U.S. dollar this
morning, with the euro dropping against the greenback following
weak economic data in Europe. At last check, the U.S. Dollar Index
was up 0.26% at 80.04. Gold's advance has been slowed by the
rebound in the dollar, with the lead contract up a mere $1.40 at
$1,293.50 an ounce in London. Finally, crude futures are retreating
as investors remain concerned about falling demand and rising
supply. In premarket trading, the most active crude contract has
fallen 49 cents to $74.22 per barrel.
Unusual Put and Call Activity:
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