The Dow Jones Industrial Average (DJIA) added a mere 13 points
on Wednesday, as the blue chip barometer continues to consolidate
into support at the 11,350 level. Heading into the open this
morning, the Dow appears to be moving higher, with futures on the
DJIA and the S&P 500 Index (SPX) trading roughly 33 points and
4.9 points above fair value, respectively. With Europe and Asia
relatively quiet for the moment, traders have turned their
attention to today's report on weekly U.S. jobless claims.
Technically, support is solidifying in the 11,350 region for the
DJIA, while resistance at the 11,400 level remains firm. That said,
that very narrow 50-point trading range may not hold much longer;
the Dow has tended to break sharply whenever it has approached an
annual peak this year. Finally, the SPX is looking for a foothold
above the 1,228 level, which is home to the index's November high.
However, the 1,235 level remains a significant short-term hurdle
for the SPX.
In equity news, lululemon athletica Inc. (
) reported a third-quarter profit of $25.7 million, or 36 cents per
share, as revenue rose to $175.8 million. Wall Street analysts were
expecting earnings of 25 cents per share on revenue of $159.6
million. Looking ahead, LULU anticipates fourth-quarter earnings of
46 cents per share to 48 cents per share, above the current
consensus estimate for a profit of 41 cents per share.
In mergers and acquisitions, Helen of Troy Ltd. (
) is buying Kaz Inc. for $260 million in cash, with the deal
expected to close by the end of 2010. Kaz owns the rights to market
products under the brand names Vicks and Braun through a license
from Procter & Gamble Co. (
). Also, MasterCard Inc. (
) purchased Travelex's prepaid card program management business for
$458 million. The companies expect the deal to close in the first
half of 2011.
Finally, Smithfield Foods Inc. (
) banked a second-quarter profit of $143.7 million, or 86 cents per
share, as sales rose 11% to $3 billion. Analysts were expecting
earnings of 56 cents per share on sales of $3.1 billion.
On the earnings front, Brown-Forman Corp (BF.B), Ciena Corp.
(CIEN), Costco Wholesale Corp. (COST), Learning Tree International
Inc. (LTRE), National Semiconductor Corp. (NSM), and Pall
Corporation (PLL) are scheduled to release their quarterly reports
today. Keep your browser at
for more news as it breaks.
The Street will be greeted with the weekly report on jobless
claims today, as well as October's wholesale inventories. We round
out the week tomorrow with November's import/export prices,
December's University of Michigan consumer sentiment index, and
November's Treasury budget.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,379,230 call contracts traded on Wednesday, compared
to 681,958 put contracts. The resultant single-session put/call
ratio arrived at 0.49 while the 21-day moving average held at
**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
Overseas trading has a bullish bias this morning, with six of
the 10 foreign indexes that we track in positive territory. The
cumulative average return on the collective is flat. Asian markets
finished mostly higher, with South Korean shares jumping to a
three-year high after the country's central bank left interest
rates unchanged. However, China's Shanghai Composite plunged as
investors anticipated an interest rate increase from the People's
Bank of China. Meanwhile, technology stocks are helping to provide
a bullish bias in Europe, after ASML Holding (ASML) forecast
stronger-than-expected demand for lithography equipment. Still,
gains were limited due to pressure on the banking sector after
Fitch Ratings cut Ireland to "BBB+" from "A+."
Currencies and Commodities
The U.S. dollar remains strong against its foreign competitors
this morning, with the greenback gaining notable ground versus the
euro. At last check, the U.S. Dollar Index was up 0.28% at 80.22.
Crude futures have retreated from their overnight highs, but remain
in positive territory, with the front-month contract up 33 cents at
$88.61 per barrel. Finally, gold futures are modestly higher in
London, adding $2.60 to $1,385.80 an ounce.
Unusual Put and Call Activity:
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