The Dow Jones Industrial Average (DJIA) finished Tuesday with a
triple-digit deficit, but came off its session lows after the
Federal Open Market Committee (FOMC) vowed to maintain rock-bottom
interest rates. In the same vein, the S&P 500 Index (SPX) and
Nasdaq Composite (COMP) gave up 1.1% and 1.3%, respectively, as
stocks slid in parity with overseas markets. What's more, the CBOE
Market Volatility Index (VIX) - also known as the market's "fear
gauge" - hit record options volume on Tuesday, topping the
one-million-contract benchmark for the first time ever. Ahead of
the bell, however, futures are mixed, as investors continue to keep
an eye on Japan and the Middle East, where fighting in Bahrain has
intensified.
At last check, the Dow was trading more than 50 points above
fair value - likely taking a cue from Japan's Nikkei index, which
bounced back after its worst performance in 24 years. On the other
hand, the SPX was last 3.5 points lower.
In equities news, Pacific Sunwear (
PSUN
) reported an adjusted fourth-quarter loss of 33 cents per share,
while revenue for the quarter fell 10% to $263 million. The results
fell short of Wall Street's expectations, which called for a loss
of 32 cents per share on sales of $271 million. The apparel company
also predicted a first-quarter loss of 29 cents to 35 cents per
share, compared to analysts' expectations for a loss of 22 cents
per share.
Elsewhere, Vera Bradley (
VRA
) announced last night that its fiscal fourth-quarter earnings
declined 18% to $14.2 million, or 35 cents per share. On an
adjusted basis, VRA earned 39 cents per share, while revenue rose
29% to $109.4 million. Analysts, on average, were looking for a
profit of 27 cents per share on $96 million in revenue.
Finally, according to media reports, Morton's Restaurant Group (
MRT
) is considering putting itself up for sale, in an effort to
enhance shareholder value. The Chicago firm's two largest
shareholders, Laurel Crown Partners LLC and Castle Harlan Inc.,
apparently support the decision. The shares of MRT settled at $6.44
on Tuesday, but are poised to skyrocket right out of the gate.
Earnings Preview
On the earnings front, General Maritime Corp. (
GMR
), Guess Inc. (
GES
), and Medivation Inc. (MDVN) are slated to release their quarterly
earnings reports. Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The Street will get word on February's housing starts and
building permits today, as well as the latest producer price data
and regularly scheduled crude inventories report. Finally, the
economic calendar will wind down tomorrow with the government's
weekly jobless claims and the Conference Board's index of leading
indicators, as well as the latest data on consumer prices,
industrial production, and manufacturing activity in the
Philadelphia region.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,490,495 call contracts traded on Tuesday, compared to
1,073,923 put contracts. The resultant single-session put/call
ratio jumped to 0.72, while the 21-day moving average edged higher
to 0.61.
Trading the News: A Contrarian View.
Check out this special report from Bernie Schaeffer
here.
Overseas Trading
Asian markets enjoyed a much-needed bounce today, with Japan's
Nikkei surging 5.7% on the heels of its worst two-day performance
since 1987. Investor sentiment in the region remains shaky, given
the ongoing crisis at the crippled Fukushima Daiichi nuclear plant,
but other indexes also notched respectable gains. The Shanghai
Composite added 1.2%, South Korea's Kospi gained 1.8%, and Hong
Kong's Hang Seng eked out a 0.1% rise.
On the other hand, European stocks are sitting on modest
declines at midday. Traders took their cues from a downgrade of
Portugal's debt, with Moody's slashing its rating by two degrees to
"A3." At last check, Spain's IBEX 35 was off 1.2%, the French CAC
40 shed 0.8%, London's FTSE 100 was down 0.7%, and the German DAX
was fractionally higher.
Currencies and Commodities
The U.S. dollar is poised to extend its gains this morning, as
the U.S. Dollar Index was seen up about 0.3% at 76.55. Elsewhere,
crude futures are also headed higher, after exploring four-week-low
territory on Tuesday. In electronic trading, the April crude
futures contract has added 1.5% to $99.43 per barrel. Finally, gold
futures have also bounced back, advancing 0.5% to hover just shy of
the $1,400 neighborhood.
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
.
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.