Opening View: DJIA Threatens 11,000 Ahead of Jobs Data

By
A A A

The Dow Jones Industrial Average (DJIA) soared nearly 200 points on Tuesday, placing the blue chip barometer within striking distance of the 11,000 level. However, the looming ADP private-sector employment report has Wall Street on pins and needles heading into the open this morning, as futures on the DJIA and S&P 500 Index (SPX) are trading roughly 26 points and 2.8 points above fair value, respectively. Economists are expecting a rise of 20,000 jobs, on average, for the private sector. This report is seen by many as a bellwether for Friday's official nonfarm payrolls report and unemployment rate, so expect a sharp reaction if the figures come in sharply above or below the 20,000 baseline. A better-than-expected report could easily send the DJIA above the 11,000 mark, and potentially challenge its April highs. Look for support to hold near 10,750 should things turn sour. As for the SPX, resistance rests near 1,175, with potential short-term support near 1,150.

In equity news, Costco Wholesale Corp., ( COST ) reported fiscal fourth-quarter net income rose 16% to $432 million, or 97 cents per share, as net sales advanced 7.8% to $23.59 billion. Comparable sales rose 6% from the same quarter last year. Analysts were looking for a profit of 95 cents per share on $24.15 billion in sales.

Elsewhere, Pfizer Inc. ( PFE ) said that it is reviewing the potential divesture of its Capsugel business. PFE has hired Morgan Stanley to help with the review, and intends to announce its decision by the end of the first quarter. Capsugel generated $740 million in revenue last year, or about 1.6% of the Pfizer's total 2009 revenue.

Finally, Eola Property Trust filed for a $675 million initial public offering (IPO). Bank of America Merrill Lynch, Barclays Capital, and Wells Fargo Securites are listed as underwriters of the IPO. The company will trade on the New York Stock Exchange under the symbol EOLA. Eola specializes in office buildings in the Southeastern and mid-Atlantic United States.

Earnings Preview

On the earnings front, Constellation Brands, Inc. ( STZ ), Monsanto Company ( MON ), and Marriott International, Inc. ( MAR ) will release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

We'll get the usual weekly report on U.S. petroleum supplies today, along with the ADP report on September private sector employment. Tomorrow, the Labor Department will release the weekly new jobless claims figures, while the Federal Reserve will report on consumer credit use in August. Finally, September's nonfarm payrolls report and unemployment rate will arrive on Friday, as will the Commerce Department's report on August wholesale inventories.

Market Statistics

Equity option activity on the CBOE saw 1,343,040 call contracts traded on Tuesday, compared to 753,983 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average held at 0.59.

Volatility indices

NYSE and Nasdaq summary

**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.**

Dow, S&P and Nasdaq futures

Click here for the new summer issue of SENTIMENT magazine

Overseas Trading

Since China's Shanghai Composite remains closed through Friday, Oct. 8, only nine of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at an impressive 0.82%. In Asia, real estate firms led a broad rally in Japan after the central bank cut interest rates for the first time in nearly two years. Hong Kong's Hang Seng vaulted to its highest level of 2010. Across the pond in Europe, regional indexes are headed broadly higher due to rising optimism on Wall Street.

Overseas markets

Currencies and Commodities

The U.S. Dollar Index is treading water just above breakeven this morning, up 0.03% at 77.77. The dollar has gained ground versus the euro this morning, rising in the wake of Fitch's downgrade of Ireland's sovereign debt. However, the greenback continues to struggle against a strengthening Japanese yen. Elsewhere, gold for December delivery has powered steadily higher in London, adding $6.60 to $1,346.90 an ounce. Finally, crude futures are faltering ahead of this morning's U.S. stockpile data from the Energy Information Agency. At last check, the December crude contract was down 18 cents at $82.64, just shy of a five-month high.

Currencies and commodities

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

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 edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options

Referenced Stocks: COST , MAR , MON , PFE , STZ

Schaeffer's Investment Research

Schaeffer's Investment Research
  • See all for Schaeffer's Investment Research
  • View Print Version

More from Schaeffer's Investment Research:

Related Videos

Budgeting for Baby
Budgeting for Baby                  

Stocks

Referenced

Most Active by Volume

86,692,048
  • $16.82 ▼ 1.35%
66,073,054
  • $13.30 ▼ 6.27%
54,801,491
  • $14.59 ▼ 1.35%
54,305,010
  • $76.55 ▼ 3.15%
53,982,567
  • $3.42 ▼ 2.01%
53,146,472
  • $97.21 ▼ 1.60%
50,334,521
  • $99.18 ▼ 1.56%
44,049,276
  • $25.03 ▼ 0.56%
As of 10/1/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com