The Dow Jones Industrial Average (
DJIA
) was hammered for a 149-point loss yesterday, and the DJIA enters
today trading below a 50% retracement of its 2010 high and low. The
position is precarious in that the Dow is hovering just above key
support at the 10,290 area, home to prior resistance and its 10-day
moving average, even as traders prepare for the Fed's decision on
U.S. monetary policy. Along the same lines, the S&P 500 Index (
SPX
) plunged below its widely watched 200-day moving average
yesterday. This trendline is viewed by many market technicians as a
bull/bear market line of demarcation. Heading into the open,
futures on the DJIA and the SPX are trading about 41 points and 4.5
points above fair value, respectively. Finally, keep in mind that
market headwinds could be significant in this post-expiration week
environment, as traders reestablish hedges that expired last week.
This activity could also increase volatility, as seen by the CBOE
Market Volatility Index's (
VIX
) continued rebound from support at its 200-day moving average.
In earnings news, Adobe Systems Inc. (
ADBE
) reported second-quarter earnings of 44 cents per share, excluding
items, as revenue rose to $943 million. Analysts had expected Adobe
to post a profit of 43 cents per share on $905.9 million in
revenue. In pre-market trading, ADBE shares were last seen lower by
more than 2%.
Elsewhere, Red Hat Inc.'s (
RHT
) first-quarter earnings, excluding items, came in at 18 cents per
share, with revenue jumping 20% to $209 million. The quarterly
results were in line with Wall Street's views, while revenue topped
expectations for $202.9 million. RHT shares were flat in pre-market
trading.
Rounding out our equity coverage, Jabil Circuit Inc. (
JBL
) said that it swung to a third-quarter profit of $52 million, or
24 cents per share, as revenue grew to $3.46 billion from $2.62
billion. Analysts had expected earnings of 34 cents per share on
revenue of $3.21 billion. Heading into the open, JBL shares have
vaulted nearly 9% higher.
Earnings Preview
On the earnings front, Canadian Solar Inc. (
CSIQ
), CarMax Inc. (
KMX
), Rite Aid Corp. (
RAD
), Bed Bath & Beyond Inc. (
BBBY
), Darden Restaurants Inc. (
DRI
), and NIKE Inc. (
NKE
) are scheduled to release their quarterly reports today. Keep your
browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
Weekly U.S. petroleum supplies will be overshadowed later today
by the Federal Open Market Committee's interest rate decision.
Tomorrow brings the usual weekly initial jobless claims, as well as
May's durable goods orders. Finally, we round 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 1,017,734 call contracts traded on Tuesday, compared to
649,261 put contracts. The resultant single-session put/call ratio
arrived at 0.64, while the 21-day moving average slipped to
0.62.
**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.**
Every morning, our research staff analyzes the prior day and
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Overseas Trading
Overseas trading is in poor shape this morning, as only two of
the 10 foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a loss of
0.42%. In Asia, stocks dropped as weaker-than-expected U.S. housing
data and declining commodities prices weighed on investor
sentiment. Meanwhile, European shares fell for a second straight
day on caution over global economic growth. Financials were among
the leading losers. Overseas market information comes to you
courtesy of
Schaeffer's Daily Bulletin
.
Currencies and Commodities
With the Fed's monetary policy statement just hours away,
currency traders are allowing the U.S. dollar to languish. Most
analysts expect the central bank to hold rates steady and maintain
its "extended period" policy on record low rates, a factor which
has sapped the dollar's strength. Heading into the open, the U.S.
Dollar Index is off 0.13% at 86.00. Meanwhile, the weaker dollar is
having an uplifting effect on gold prices, with the front-month
contract up $5.10 at $1,245.90 in London. Finally, a sharp build in
U.S. petroleum stockpiles is being blamed for a decline in crude
oil futures in early activity. The American Petroleum Institute
reported last night that crude inventories rose by 3.69 million
barrels, igniting debate over rising supply and declining demand.
At last check, crude futures were down 37 cents at $77.48 per
barrel.
Unusual Put and Call Activity:
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Education Center
topics on
Option Volume
and
Open Interest Configurations
.
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