The Dow Jones Industrial Average (DJIA) rallied to a new
two-year high of 12,254.23 on Wednesday, but pulled back to end the
session at 12,239.89. Heading into the open, futures on the DJIA
and the S&P 500 Index (SPX) are trading roughly 41 points and
6.5 points below fair value, respectively. Dragging the Dow down is
a disappointing report from blue chip heavyweight Cisco Systems (
), which reported earnings after the close on Wednesday.
Technically, the 12,200 region could provide a short-term floor for
the DJIA, with the 12,050 region, site of the Dow's 10-day moving
average, providing additional support against potential pullbacks.
Resistance, meanwhile, could emerge in the 12,250-12,300 region.
Turning to the SPX, the 1,315 area could emerge as a floor, as the
index has closed three consecutive sessions above this level.
Additional support for the SPX lies in the 1,305 region, which is
home to the index's 10-day moving average. Resistance remains in
the 1,320-1,325 area.
After the close last night, Cisco Systems Inc. (
) posted second-quarter net income of $1.52 billion, or 27 cents
per share, down from a profit of $1.85 billion, or 32 cents per
share, in the same quarter last year. Non-GAAP earnings came in at
$2.1 billion, or 37 cents per share, while total revenue rose 6% to
$10.4 billion. Wall Street was anticipating a profit of 35 cents
per share on revenue of $10.3 billion, according to
. Gross margin slipped for the fourth consecutive quarter, falling
to 60.2% from 64.5%. The blue chip behemoth is currently down 10.6%
in premarket activity.
Meanwhile, Akamai Technologies Inc. (
) reported that its fourth-quarter earnings soared 32% to $52.5
million, or 27 cents per share, from $39.7 million, or 21 cents per
share, a year ago. On an adjusted basis, Akamai would have earned
40 cents per share. Revenue rose 12% to $284.7 million. According
, analysts were expecting a profit of 38 cents per share on revenue
of $283.6 million.
Finally, PepsiCo, Inc. (
) announced this morning that its fourth-quarter earnings came in
at $1.05 per share, surpassing analysts' estimate by a penny. The
beverage giant said its sales increased 37% to $18.17 billion,
boosted by acquisitions in 2010. However, PEP's downwardly revised
2011 forecast for earnings growth of 7-8% concerned traders, and
the shares are off 2.5% in premarket activity.
On the earnings front, BorgWarner Inc. (
), PepsiCo Inc. (
), Philip Morris International Inc. (
), Sprint Nextel Corp. (S), The Cheesecake Factory Inc. (CAKE),
Hoku Corp. (HOKU), Kraft Foods Inc. (KFT), MannKind Corp. (MNKD),
and Panera Bread Company (PNRA) are slated to release their
quarterly earnings reports today. Keep your browser at
for more news as it breaks.
We round out the week today with the December trade deficit and
the University of Michigan's initial consumer sentiment index for
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,426,111 call contracts traded on Wednesday, compared
to 790,201 put contracts. The resultant single-session put/call
ratio arrived at 0.55, 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
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Overseas trading looks weak this morning, as just one of the 10
indexes that we track is trading in positive territory. The
cumulative average return on the collective stands at a loss of
0.80%. In Asia, stocks fell as investors mulled the effects of
declining crude prices. Japan's benchmark Nikkei fell 12.2%, to
10,605.65 on Thursday as investors took profits amid growing
concerns of a pullback in the market. Meanwhile, European shares
fell on Thursday following a round of lackluster earnings reports
from companies such as Credit Suisse (CS) and Diageo plc (DGE).
Currencies and Commodities
Crude futures fell on Wednesday thanks to an unexpected increase
in domestic stockpiles, as well as growing concerns over the health
of Saudi King Abdullah. Heading into the open, the March crude
contract has slipped 31 cents to trade at $86.40 per barrel.
Meanwhile, the U.S. Dollar Index has added 42 cents at 78.06. As a
result, gold futures are down this morning; in London, gold has
fallen $7.70 to trade at $1,357.80 an ounce.
Unusual Put and Call Activity:
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