Technically, the DJIA soared 124 points on Tuesday to reclaim
potential short-term support at the 12,200 level. The area is also
home to the Dow's 20-day moving average. Still, resistance lingers
overhead in the 12,250-12,300 region. The SPX, however, was unable
to reclaim its own 20-day moving average, with the broad-market
index finding resistance in the 1,325 area. Support, meanwhile,
continues to hold at the SPX's rising 10-week moving average. The
index has not closed a week below this trendline since late August
2010. Finally, traders should keep a close watch on 1,333.58, which
marks a double of the SPX's March 2009 intraday
low
.
In earnings news, Navistar International Corp. (
NAV
) said that it swung to a first-quarter loss of $6 million, or 8
cents per share, from a profit of $19 million, or 26 cents per
share, last year. On an adjusted basis, NAV earned 16 cents per
share in the quarter, with revenue coming in at $2.74 billion. Wall
Street was expecting a profit of 24 cents per share on revenue of
$2.89 billion. Looking ahead to fiscal 2011, the company affirmed
its outlook for adjusted earnings of $5 to $6 per share on an
adjusted basis. The current consensus estimate places expectations
at $5.17 per share for 2011.
After the close last night, Texas Instruments Inc. (
TXN
) narrowed its first-quarter sales forecast to a range of $3.34
billion to $3.48 billion. The company had previously expected sales
of $3.27 billion to $3.55 billion. TXN also narrowed its earnings
expectations to between 56 cents to 60 cents per share, compared
with a prior forecast for a profit of 54 cents to 62 cents per
share.
Finally, Honeywell International Inc. (
HON
) guided to first-quarter earnings of 80 cents per share on revenue
of $8.7 billion. Analysts are currently expecting earnings of 82
cents per share on revenue of $8.52 billion. For fiscal 2011,
Honeywell affirmed its prior guidance for earnings of $3.60 to
$3.80 per share on revenue of $35 billion to $36 billion. Wall
Street currently has its sights set on a profit of $3.83 per share
on revenue of $35.84 billion.
Earnings Preview
On the earnings front, H&R Block (
HRB
), American Eagle Outfitters (
AEO
), Hercules Offshore (HERO), and Molycorp (MCP) are slated to
release their quarterly earnings reports. Keep your browser at
SchaeffersResearch.com
for more news as it breaks.
Economic Calendar
Today, the economic calendar brings us word on wholesale
inventories for January, the latest MBA mortgage applications
survey, and the regularly scheduled update on domestic petroleum
supplies from the Energy Information Administration (EIA). The
weekly report on jobless claims hits the Street on Thursday, along
with import/export data for January. We wrap up the week on Friday
with the preliminary Thomson Reuters/University of Michigan
consumer sentiment survey for March, along with comments from New
York Fed President William Dudley.
Market Statistics
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,233,932 call contracts traded on Tuesday, compared to
684,205 put contracts. The resultant single-session put/call ratio
arrived at 0.55, while the 21-day moving average slipped to
0.57.
Trading the News: A Contrarian View.
Check out this special report from Bernie Schaeffer
here.
Overseas Trading
Overseas trading looks strong this morning, as nine of the 10
foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a gain of
0.29%. In Asian trading, earthquakes off Japan's northern coast
prompted shaky trading early in the session, but upbeat January
machinery orders put investors in a buying mood. The rest of the
region also headed higher, keying off falling oil prices. Across
the pond in Europe, regional markets are mixed, with energy-related
stocks and banks creating drag. Traders were also focusing on
Portugal's 1 billion-euro bond auction, and news that Germany's
industrial production rose 1.8% in January.
Currencies and Commodities
Oil futures remain weak this morning, even as the U.S. dollar
reverses yesterday's gains. At last check, the April crude contract
was off 13 cents at $104.89 per barrel in electronic trading. As
for the greenback, the U.S. Dollar Index's two-day rally ran into a
wall in the $77 region, with the index once again meeting
resistance at its declining 10-day moving average. In premarket
trading, the U.S. Dollar Index is off 0.27% at 76.60. Finally, the
dollar's weakness has provided lift for gold prices, with the lead
gold futures contract up $5.10 at $1,432.30 an ounce in London.
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our
Education Center
topics on
Option Volume
and
Open Interest Configurations
.
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