The Dow Jones Industrial Average (
DJIA
) came roaring back on Monday, surging more than 400 points in the
wake of the European Union's moves to prop up the euro and bailout
Greece. However, the Dow's rally was capped by its 50-day moving
average, which is currently resting near 10,850. Look for this
region to persist as short-term resistance, while support could
materialize near 10,700. As for the S&P 500 Index (
SPX
), short-term resistance lies in the 1,170 area, while support
should hold near 1,150. Heading into the open, it appears that
investors are finally digging into the European bailout plan, and
are finding it not quite to their liking. Specifically, futures on
the DJIA and the SPX are trading 112 points and 11 points below
fair value, respectively. Finally, even volatility has been
volatile recently. The CBOE Market Volatility Index (
VIX
) plunged more than 29% yesterday, after spiking an impressive 85%
last week. The VIX is currently trading just shy of the 30 level,
which it may surpass once again today if U.S. stock futures trading
is any indication.
In earnings news, priceline.com Inc. (
PCLN
) said first-quarter net income rose to $1.06 per share, or $1.70
per share on a pro forma basis, from 53 cents per share a year ago.
Revenue grew 26.5% to $584.4 million. Analysts estimated earnings
of $1.66 per share. The stock is down more than 12.6% in pre-market
trading.
Elsewhere, LDK Solar Co. Ltd. (
LDK
) reported a first-quarter profit of $7.2 million, or 6 cents per
share. Analysts were looking for a profit of 2 cents per share.
Sales rose 23% to $347.6 million from a year ago. Gross profit
margin expanded to 15.7% from 1.7%. In electronic trading, LDK has
rallied more than 3.4%.
Finally, J.C. Penney Co. (
JCP
) was downgraded to "neutral" from "overweight" by JPMorgan Chase
this morning. The brokerage firm cited increased competition from
rival Macy's Inc. (
M
) and challenges in its home business. What's more, JPMorgan said
that JCP's five-year growth target may be too optimistic. Heading
into the open, JCP shares were off 3.38%.
Earnings Preview
On the earnings front, Fossil Inc. (
FOSL
), JA Solar Holdings Co., Ltd. (
JASO
), Electronic Arts Inc. (
ERTS
), SunPower Corp. (
SPWRA
), and The Walt Disney Co. (
DIS
) 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 1,656,149 call contracts traded on Monday, compared to
1,045,195 put contracts. The resultant single-session put/call
ratio arrived at 0.63, while the 21-day moving average rose to
0.54.
**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
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Overseas Trading
It's all or nothing in overseas trading this week, as none of
the 10 foreign indexes that we track are in positive territory this
morning. The cumulative average return on the collective stands at
a loss of 1.75%. In Asia, most stocks finished lower, as doubt
lingered about how Greece and other debt-laden euro zone countries
will reduce their budget deficits. Turning to Europe, stocks
retreated, as doubts about Greece's ability to smoothly cut its
fiscal deficit persisted. Overseas market information comes to you
courtesy of
Schaeffer's Daily Bulletin
.
Currencies and Commodities
Crude futures are back in the headlines this morning, as traders
realized that they may have jumped on the recovery bandwagon too
soon. Specifically, investors are nervous ahead of tomorrow's U.S.
petroleum supplies report. After yesterday's roughly 2% rally,
crude futures are down 1.54% at $75.62 per barrel in electronic
trading this morning. The U.S. dollar is also applying pressure to
crude, as the greenback is once again a favorite safe-haven
investment amid global economic uncertainty. Ahead of the open, the
U.S. Dollar Index has added 0.50% to trade at 84.58. Finally, gold
has regained quite a bit of its luster amid the European debt
crisis. The malleable metal is making gains again this morning,
rallying $15.80 to $1,216.60 an ounce in London.
Unusual Put and Call Activity:
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