Yesterday saw another 145 points spiral down the drain for the
Dow Jones Industrial Average (
DJIA
), as the blue-chip barometer succumbed to fears about a drawdown
in the retail sector. If you are looking for technical support, the
Dow could find short-term ballast in the 10,100 area, while the
10,000 remains a key psychological backstop. As for the S&P 500
Index (
SPX
), look for short-term support near 1,065, with the May 2010 lows
of 1,040 a key level for the bulls to hold. On a side note, I find
it interesting that despite the volatility of the past several
weeks, the SPX has offered up very little net directional movement.
Specifically, the index closed at 1,071.59 on May 20, and enters
today trading at 1,073.69. On the futures front, the DJIA and SPX
are trading 14 points and 2 points above fair value, respectively,
heading into the open. Finally, the small-cap focused Russell 2000
Index (
RUT
) became the latest major market index to breach its 200-day
trendline. Small caps have led Wall Street's rebound out of this
economic morass, and the RUT's dip below this key technical moving
average is yet another warning sign for bullish investors.
In earnings news, Research In Motion Limited (
RIMM
) said that its first-quarter net income soared 20% as the
BlackBerry maker shipped 11.2 million handsets. RIMM reported a
profit of $768.9 million, or $1.38 per share, with revenue jumping
24% to $4.24 billion. Analysts were looking for earnings of $1.35
per share, on revenue of $4.35 billion. Looking ahead, RIMM
predicted adjusted earnings of $1.33 to $1.40 per share, on revenue
ranging from $4.4 billion to $4.6 billion. Wall Street is currently
forecasting a profit of $1.32 per share on revenue of $4.52
billion. Finally, the company also said it will repurchase up to 31
million shares during the next 12 months. In pre-market trading,
RIMM has plunged more than 5% following the report.
Finally, Oracle Corp. (
ORCL
) said its fourth-quarter net income rose to $2.4 billion, or 46
cents per share, as revenue rose 39% to $9.5 billion. Excluding
special items, Oracle said earnings for the quarter were 60 cents
per share. Analysts had expected earnings excluding items of 54
cents per share, and $9.5 billion in revenue. In electronic
trading, ORCL is up more than 4.6%.
Earnings Preview
On the earnings front, KB Home (
KBH
) is the lone company heading into the earnings confessional today.
Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
The economic calendar rounds out the week with the initial
third-quarter gross domestic product reading and June's final
University of Michigan consumer sentiment index.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (
CBOE
) saw 969,164 call contracts traded on Thursday, compared to
795,712 put contracts. The resultant single-session put/call ratio
arrived at 0.82, while the 21-day moving average held at 0.63.
**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.**
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Overseas Trading
We are seeing heavy losses across the board in overseas trading
this morning, as none of the 10 foreign indexes that we track are
in positive territory. What's more, the cumulative average return
on the collective stands at a loss of 0.84%. In Asia, stocks
struggled, with traders concerned about emerging cracks in an
already tenuous global economic recovery. Furthermore, stocks in
Tokyo were hit hard due to concerns that the yen would continue to
rally against its foreign rivals. Turning to Europe, trading is
down, with the indexes hitting a two-week low ahead of the weekend
G20 meeting. Meanwhile, BP has tagged a 14-year low as it struggles
to clean up the Gulf of Mexico oil spill. Overseas market
information comes to you courtesy of
Schaeffer's Daily Bulletin
.
Currencies and Commodities
Continued global weakness has driven demand for the U.S. dollar
this week, despite China's pledge to allow the yuan a little more
wiggle room in terms of appreciation. In pre-market trading this
morning, the U.S. Dollar Index is rebounding from lows in Asian
trading, rising 0.29% to 85.99. Meanwhile, gold futures are showing
signs of early weakness, with the front-month contract slipping
$1.40 to $1,244.50 and ounce in London. Finally, crude futures are
also lower, with the lead contract down 22 cents at $76.29 per
barrel.
Unusual Put and Call Activity:
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topics on
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and
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