The Dow Jones Industrial Average (DJIA) is headed sharply lower
this morning, as Wall Street reels from reports of an exchange of
fire between North and South Korea. North Korea fired dozens of
artillery rounds at a South Korean island near the two nations'
western border, and South Korea said it fired back. The escalation
between the Koreas is grating on U.S. investors already bedraggled
by Ireland's ongoing debt concerns. Heading into the open, futures
on the DJIA and the S&P 500 Index (SPX) are trading roughly 90
points and 11 points below fair value. Look for the Dow to
potentially test support at the 11,000 level today, with resistance
remaining firm at the 11,200 level. The SPX, meanwhile, should hold
support at the 1,175 level, with resistance holding at the 1,200
level.
In equity news, Campbell Soup Co. (
CPB
) reported a first-quarter profit of $279 million, or 82 cents per
share. Sales for the quarter were $2.17 billion. Wall Street was
expecting a profit of 83 cents per share on sales of $2.2 billion.
Looking ahead CPB said it sees fiscal 2010 earnings growth of
2%-4%, and fiscal 2011 sales growth of 1%-3%. In a statement, the
company said that it plans "to place greater focus on advertising
and brand-building initiatives in our marketing efforts."
Also, Hewlett-Packard (
HPQ
) reported a fourth-quarter profit of $2.5 billion, or $1.10 per
share, on revenue of $33.3 billion. Adjusted income was $1.33 per
share. Analysts had expected the company to post earnings of $1.27
per share on revenue of $32.7 billion. For the current quarter, HPQ
said that it sees adjusted earnings of $1.28 to $1.30 per share on
revenue of roughly $32.8 billion to $33 billion. Wall Street
currently expects earnings of $1.22 per share on $32.72 billion in
sales.
Brocade Communications Systems (
BRCD
) reported fourth-quarter non-GAAP earnings of $66 million, or 14
cents per share, on revenue of $550 million. Analysts were
expecting earnings of 13 cents per share on revenue of $536.11 for
the period. Looking ahead, the company said that it expects revenue
for the current quarter to arrive in a range of $535 million to
$550 million, below the current consensus estimate for revenue of
$555.6 million.
Earnings Preview
On the earnings front, Cracker Barrel Old Country Store Inc. (
CBRL
), Hormel Food Corp. (
HRL
), TiVO Inc. (TIVO), and Guess?, Inc. (GES) will release their
quarterly reports today. Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The second estimate on third-quarter gross domestic product will
arrive today, accompanied by October's existing home sales. The
Street will be drenched in data tomorrow, with October's personal
income and spending reports, October durable goods orders, weekly
initial jobless claims, November's University of Michigan consumer
sentiment index, October's new home sales, and weekly U.S.
petroleum supplies. The market is closed for Thanksgiving on
Thursday, and there are no economic reports slated for release on
Friday.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,339,851 call contracts traded on Monday, compared to
765,451 put contracts. The resultant single-session put/call ratio
arrived at 0.57, while the 21-day moving average fell to 0.57.
**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.**
Overseas Trading
Overseas trading looks 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
1.25%. Reports that North Korea and South Korea exchanged fire
dominated the landscape in both Asian and European trading, with
regional indexes declining roughly 1% across the board. Losses in
Hong Kong neared 3%, while China's Shanghai dipped roughly 2%, as
the Korean conflict added to uncertainty surrounding Beijing's
ongoing monetary policy. In Europe, a strengthening dollar and
falling euro applied pressure across the region, which continues to
struggle with uncertainty surrounding the fallout from an Irish
bailout.
Currencies and Commodities
With hostilities between the Koreas boiling over once again,
safe-haven buying has quickly become the theme of the morning. The
U.S. dollar is benefiting from this flight to safety, with the U.S.
Dollar Index rising 0.31% to 78.93 in premarket trading. Naturally,
the dollar's rise is crude's demise, with the December crude oil
contract down 57 cents at $81.17 per barrel in electronic trading.
What's more, even gold, much heralded for its safe-haven qualities,
is struggling this morning, adding a mere $3.50 to trade at
$1,361.30 an ounce in London.
Unusual Put and Call Activity:
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