The "sell in May and go away" axiom was proven true once again.
The Dow Jones Industrial Average (
) dropped 1.19% on Friday to end May with a loss of 7.9%. It was
the Dow's worst May performance since 1940. What's more, June isn't
getting off on the right foot, as the DJIA is currently trading
about 114 points below fair value, potentially sending the
blue-chip barometer down for another test of 10,000. Meanwhile, the
S&P 500 Index (
) is headed toward a 15-point deficit on the open. The SPX finished
Friday with a gain of 0.2%, but plummeted 8.2% for May. Finally,
the CBOE Market Volatility Index (
) spiked 45% in May, closing above its 10-month moving average for
the first time since March 2009.
In equity news, Hewlett-Packard Co. (
) announced plans to spend $1 billion to automate its commercial
data centers. As a result the company will eliminate about 9,000
jobs over the next several years. H-P expects to generate
annualized gross savings of approximately $1 billion, and net
savings after reinvestment in a range between $500 million and $700
American International Group Inc. (
) has rejected efforts by the United Kingdom's Prudential (
) to lower the $35.5 billion selling price for AIG's Asian
insurance unit. The deal is now likely dead.
Finally, Fitch Ratings lifted Oracle Corp.'s (
) outlook to positive and affirmed its long-term issuer default
rating at A. According to Fitch, Oracle has ample liquidity, and a
strong customer renewal rate despite the economic downturn.
Furthermore, the ratings agency said that it may upgrade Oracle's
rating if the company can successfully integrate Sun
On the earnings front, Collective Brands Inc. (
) and Shanda Interactive Entertainment Ltd. (
) are scheduled to release their quarterly reports today. Keep your
for more news as it breaks.
Equity option activity on the Chicago Board Options Exchange (
) saw 893,256 call contracts traded on Friday, compared to 522,284
put contracts. The resultant single-session put/call ratio arrived
at 0.58, while the 21-day moving average held at 0.67.
**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
Every morning, our research staff analyzes the prior day and
the overnight markets, and monitors the morning wires to give you
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Overseas trading is abysmal 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
1.65%. In Asia, stocks slipped on concerns about slowing growth in
China and Europe in the second half of the year. Elsewhere,
European shares alo fell, with BP slumping after an attempt to plug
the Gulf oil spill failed. Overseas market information comes to you
Schaeffer's Daily Bulletin
Currencies and Commodities
Weakness in the euro is once again providing lift for the U.S.
dollar this morning. In fact, the euro plunged to yet another
four-year low in European trading, hitting near $1.2143. Meanwhile,
the U.S. Dollar Index tagged an annual high earlier in pre-market
trading, and is currently sitting on a gain of 0.92% at 87.39. The
stronger dollar and concerns about Chinese demand are weighing on
crude futures, as black gold has plunged 2.53% to $72.10 per barrel
heading into the open. Finally, the renewed global turmoil has
placed a premium on gold prices, with the most active futures
contract up $8.90 at $1,223.90 an ounce in London.
Unusual Put and Call Activity:
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