Opening View: Will the Fed's Beige Book End the DJIA's Winning Streak?

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The Dow Jones Industrial Average (DJIA) limped over the finish line on Tuesday to log its fourth consecutive win in a row. Granted, the DJIA gained only 12 points, but it's the thought that counts. The blue-chip barometer is holding above support near 10,500, but is being held in check by resistance near 10,600, which is home to the Dow's June 21 peak. Meanwhile, the S&P 500 Index (SPX) is battling resistance at 1,115-1,120, with the index finishing perched on its 200-day moving average on Tuesday. Earnings continue to be a major driver on Wall Street, but economic data may take center stage today, with the latest Beige Book from the Federal Reserve. Anxiety is thick on the Street ahead of the Fed's latest assessment of U.S. economic growth, with futures on the DJIA and SPX trading seven points and 0.41 point above fair value, respectively. Finally, the CBOE Market Volatility Index (VIX) rebounded slightly on Tuesday, but met with resistance at its 200-day moving average. A rejection and extended run lower in the VIX could bode well for market bulls.

In earnings news, Dow component Boeing Co. ( BA ) said that its second-quarter profit fell 21% to $787 million, or $1.06 per share, as revenue dropped 9% to $15.57 billion. Analysts were looking for earnings of $1.04 per share on sales of $16.4 billion. The company also reaffirmed its full-year guidance of $3.50 to $3.80 per share, which remains below Wall Street's view for earnings of $3.88 per share.

Elsewhere, Las Vegas Sands Corp. ( LVS ) said that it lost $4.7 million, or a penny per share, in the most recent quarter. Revenue jumped 50.6% to $1.59 billion. On an adjusted basis, the company earned $129 million, or 17 cents per share. Analysts were expecting a profit of 9 cents per share.


Finally, Eastman Kodak Co. ( EK ) reported that its second-quarter loss from continuing operations narrowed to $167 million, or 62 cents per share. Excluding one-time items, the company said it lost 51 cents per share. Wall Street was looking for a loss of 28 cents per share. Looking ahead, Kodak said that it expects a loss from continuing operations in the range of $50 million to $150 million.

Earnings Preview

On the earnings front, ArcelorMittal ( MT ), Coca-Cola Enterprises Inc. ( CCE ), Comcast Corp. ( CMCSA ), ConocoPhillips ( COP ), Constellation Energy Group Inc. ( CEG ), International Paper Company ( IP ), M/I Homes Inc. ( MHO ), Martha Stewart Living Omnimedia Inc. ( MSO ), P.F. Chang's China Bistro ( PFCB ), Sprint Nextel Corp. ( S ), Akamai Technologies Inc. ( AKAM ), Cincinnati Financial Corp. ( CINF ), Cliffs Natural Resources Inc. ( CLF ), Goldcorp Inc. ( GG ), Green Mountain Coffee Roasters Inc. ( GMCR ), NetLogic Microsystems Inc. ( NETL ), Skechers USA Inc. ( SKX ), and Sturm, Ruger & Co. ( RGR ) are scheduled to release their quarterly earnings report today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The weekly report on U.S. petroleum supplies and the Fed's Beige Book will hit the Street today, while tomorrow sports the weekly report on initial jobless claims. On Friday, we'll get the latest numbers on second-quarter gross domestic product, along with the Chicago Purchasing Managers' Index for July, and a final look at July consumer confidence as measured by Reuters and the University of Michigan.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,332,293 call contracts traded on Tuesday, compared to 726,418 put contracts. The resultant single-session put/call ratio arrived at 0.55, while the 21-day moving average slipped to 0.61.

Volatility indices

NYSE and Nasdaq summary

**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.**

Dow, S&P and Nasdaq futures

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Overseas Trading

Overseas trading is mixed, with six of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a gain of 0.43%. Regional indexes in Asia headed higher on Wednesday, with Japanese stocks soaring on the heels of solid corporate earnings from Canon and an improving outlook for exporters. Meanwhile, Chinese stocks rallied after the central bank said that there was little risk of a "double-dip" recession. Across the pond in Europe, stocks have pulled back, potentially stopping the region's winning streak at six sessions in a row, as regional economic concerns reclaimed the limelight.

Overseas markets

Currencies and Commodities

The U.S. Dollar Index continues to bounce along support at the 82 level this week, though the index is being squeezed into this support level by resistance at its declining 10-day and 20-day moving averages. In pre-market activity, the index is off fractionally, shedding 0.05% to 82.15. The minor decline in the dollar has done little to bolster commodities, as the front-month crude contract is down 10 cents at $77.40. Crude futures appear to be in danger of reversing course once again, after tangling with resistance near $79-$80 per barrel. Finally, gold futures have risen $4 to trade at $1,165.80 an ounce in London. So far this week, gold has plunged more than 8% to trade at a multi-month low.

Currencies and commodities

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 .

Unusual options activity - puts

Unusual options activity - calls

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This article appears in: Investing , Options


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