Judging by its trading activity during the past couple of weeks,
it appears that the Dow Jones Industrial Average (
DJIA
) has settled into a 200-point trading range between support at
11,000 and resistance near 11,200. The average came close to
tagging both levels on Monday, but, given the direction of futures
trading this morning, the Dow could retest 11,000 by midday. The
S&P 500 Index (
SPX
), meanwhile, has been locked between the 1,185 and 1,215 levels
since early April. Heading into the open, futures on the DJIA and
SPX are trading 45 points and 6 points below fair value,
respectively. On the sentiment front, Senior Quantitative Analyst
Rocky White noted in
Monday Morning Outlook
this weekend that 50% of all analyst rankings tracked by
Zacks
are currently "buys." This figure has eclipsed the most recent peak
of 49%, set in mid-2006, but is still far from the extremes of 70%
plus seen during the dot-com bubble. While rising bullish sentiment
can be a sign of short-term weakness, we believe that these
readings are consistent with the market finally accepting the
current rally.
In earnings news, Pfizer Inc. (
PFE
) reported adjusted first-quarter net income of 60 cents per share,
as revenue increased 54% to $16.8 billion. Wall Street was looking
for earnings of 53 cents per share and revenue of $16.6 billion.
Looking ahead, Pfizer expects 2010 adjusted earnings of $2.10 per
share to $2.20 per share, compared to the consensus estimate for
$2.20 per share. However, the company said that it's reducing its
2012 revenue target by $800 million to reflect higher health care
costs. The stock has added nearly 2% in pre-market trading.
Elsewhere, Sirius XM Radio Inc. (
SIRI
) said it swung to a first-quarter profit of $41.6 million, or a
penny per share, from a loss of $238.8 million, or 7 cents per
share, a year earlier. Revenue rose to $663.8 million from $587
million. The company projected net subscriber additions of more
than 500,000 for the full year, with $2.7 billion in adjusted
revenue. SIRI shares are down more than 2% in electronic
trading.
Finally, CVS Caremark Corp. (
CVS
) reported a first-quarter profit of $771 million, or 56 cents per
share, on revenue of $23.76 billion. Adjusted earnings were 60
cents per share. Wall Street was looking for earnings of 58 cents
per share on sales of $24.07 billion. The company also hiked the
low end of its 2010 guidance by 3 cents to a range of $2.77 per
share to $2.84 per share. CVS has added roughly 1.3% in pre-market
activity.
Earnings Preview
On the earnings front, Archer Daniels Midland Co. (
ADM
), ArvinMeritor Inc. (
ARM
), Beazer Homes USA Inc. (
BZH
), Duke Energy Corp. (
DUK
), Fresh Del Monte Produce Inc. (
FDP
), Marathon Oil Corp. (
MRO
), MasterCard Inc. (
MA
), Merck & Co. Inc. (
MRK
), Molson Coors Brewing Co. (
TAP
), Tenet Healthcare Corp. (
THC
), Suncor Energy Inc. (
SU
), Thomson Reuters Corp. (
TRI
), Vornado Realty Trust (
VNO
), Cephalon Inc. (
CEPH
), Chesapeake Energy Corp. (
CHK
), Evergreen Solar Inc. (
ESLR
), SBA Communications Corp. (
SBAC
), and True Religion Apparel Inc. (
TRLG
) are slated to release their quarterly earnings reports. Keep your
browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
ISM
Market Statistics
Equity option activity on the Chicago Board Options Exchange (
CBOE
) saw 1,674,493 call contracts traded on Monday, compared to
891,203 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
an accurate preview of the day to come. If you enjoyed today's
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Overseas Trading
Overseas trading is in poor shape this morning, as 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
0.97%. In Asia, stocks pulled back from early gains despite a
strong session on Wall Street. China returned from a long weekend
holiday to trade lower following tightening measures from the
country's central bank. Japan remained closed for the Golden Week
holidays. European stocks fell sharply, as mounting doubts over
Greece's bailout and fears of contagion to other euro zone
countries rattled investors. Overseas market information comes to
you courtesy of
Schaeffer's Daily Bulletin
.
Currencies and Commodities
The U.S. dollar continued to gain ground on the euro in overseas
trading, with the European currency falling to a fresh one-year low
versus the greenback. Furthermore, another spike in fear
surrounding European sovereign debt has added a safe-haven bid to
the dollar's upside this morning. In pre-market trading, the U.S.
Dollar Index has gained 0.47% to trade at 82.74. The combination of
a stronger dollar and concerns over tomorrow's supply data has sent
crude futures back below the 85 mark. Specifically, crude futures
had dropped $1.29 to $84.90 per barrel in electronic trading.
Finally, gold futures are trending higher amid continued European
uncertainty. At last check, futures were up $4.20 at $1,187.50 an
ounce in London.
Unusual Put and Call Activity:
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Education Center
topics on
Option Volume
and
Open Interest Configurations
.
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