The Dow Jones Industrial Average (DJIA) is set to extend
Wednesday's losses this morning, as traders fret ahead of this
morning's economic data and news that China's economy expanded
faster than expected in the fourth quarter. Heading into the open,
futures on the DJIA and the S&P 500 Index (SPX) are trading
roughly 14 points and 0.7 point below fair value, respectively.
Wall Street will be greeted with leading economic indicators,
weekly jobless claims, and Philadelphia manufacturing data later
today, as well as a continued flood of corporate earnings reports.
Technically, the DJIA held support at the 11,800 level yesterday,
but the victory could be fleeting if premarket selling pressure
gains momentum. Look for support to emerge near the 11,750 level,
home to the Dow's 10-day moving average, while the 11,700 level
should create a more solid floor if the situation worsens. As for
the SPX, the broad-market index suffered its biggest percentage
decline since November on Wednesday, but support held firm at the
1,280 level and the SPX's 10-day moving average. This region will
be tested today, with the 1,270 area likely being called upon to
provide a backstop for the SPX.
In equity news, PNC Financial Services Group Inc. (
) reported that its fourth-quarter net profit attributable to
shareholders fell 21% to $798 million, or $1.50 per share, as
revenue dropped 20% to $3.9 billion. Excluding items, PNC said
adjusted earnings were $1.60 per share. Wall Street was looking for
a profit of $1.38 per share on revenue of $3.54 billion.
After the close last night, eBay Inc. (
) reported fourth-quarter net income of $559 million, or 42 cents
per share, down from $1.36 billion, or $1.02 per share, in the same
quarter last year. On an adjusted basis, earnings rose 17% to $684
million, or 52 cents per share. Revenue climbed 5% to $2.5 billion
from a year ago.
Elsewhere, MannKind Corp. (
) has plunged more than 44% in electronic trading, after the Food
& Drug Administration (FDA) deferred approving Afrezza, an
inhaled insulin treatment for hyperglycemia. The FDA has requested
two additional clinical trials with the inhaler.
Finally, Wendy's/Arby's Group Inc. (
) announced that it may sell Arby's Restaurant Group Inc. to
refocus on its core business. "A pure-play Wendy's will enable us
to focus all of our energies on growing the Wendy's brand via new
store growth both in North America and international markets, and
with accelerated same-store sales through the introduction of new
dayparts and core menu innovation," said Chief Executive Roland
On the earnings front, Freeport McMoRan Copper & Gold Inc. (
), Morgan Stanley (MS), Southwest Airlines Co. (LUV), UnitedHealth
Group Inc. (UNH), Advanced Micro Devices Inc. (AMD), and Google
Inc. (GOOG) are slated to release their quarterly earnings reports
today. Keep your browser at
for more news as it breaks.
On the economic front, Wall Street will be greeted with weekly
initial jobless claims, the National Association of Realtors'
existing home sales figures for December, the Conference Board's
leading indicators index for December, and the Philadelphia Fed's
January manufacturing index. Finally, we'll also get the usual
weekly report on crude inventories, a day later than usual because
of Monday's holiday. There are no major economic reports scheduled
Equity option activity on the CBOE saw 2,099,520 call contracts
traded on Wednesday, compared to 1,013,980 put contracts. The
resultant single-session put/call ratio arrived at 0.48, while the
21-day moving average held at 0.51.
**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
Trading the News: A Contrarian View.
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Overseas trading is in poor shape, with only two of the 10
foreign indexes that we track in positive territory. The cumulative
average return on the collective stands at a loss of 0.89%. The
cascade started in Asian trading, after China reported that its
gross domestic product rose 9.8% in the fourth quarter, exceeding
forecasts for 9.2% growth. The better-than-expected economic growth
stoked fears that Beijing would have to tighten monetary policy in
order to rein in inflationary pressures. European markets are
following suit; sectors with heavy Chinese exposure are leading the
Currencies and Commodities
The U.S. dollar attempted to gain some ground in overnight
trading, with investors seeking a haven from falling equities.
However, the greenback's strength was short-lived, as the U.S.
Dollar Index has since slipped 0.08% to 78.58 heading into the open
on Wall Street. Commodities are also trading lower this morning,
with crude futures down 47 cents at $91.34 per barrel, and gold
futures off $7.10 to $1,363.10 an ounce in London.
Unusual Put and Call Activity:
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