Following two days of triple-digit intraday moves on the
Dow Jones Industrial Average (DJIA)
, traders' fervor appears momentarily tempered heading into the
session. With the seemingly bearish bias emanating from the Street,
a few key technical indicators could play roles in Wednesday's
market activity, including:
. Will today's projected market weakness pull the Dow back below
this significant level?
S&P 500 Index (
, and looming overhead resistance at both its 20-day moving
average and the 1,400 mark. Neither of these levels has been
toppled since April 3.
. The "fear gauge" pulled below its 80-day moving average
yesterday, a trendline not breached on a daily closing basis
since April 12.
Among equities in focus, bears could be attracted by
IBM's (IBM )
top-line miss, while options players were picking up near-term
Intel (INTC )
ahead of its first-quarter release.
And now, on to the numbers...
Equity option activity on the Chicago Board Options Exchange (
) saw 1,198,061 call contracts traded on Tuesday, compared to
689,413 put contracts. The resultant single-session put/call ratio
arrived at 0.58, while the 21-day moving average was 0.64.
Currencies and Commodities
U.S. dollar index
is 0.3% higher this morning to trade at $79.78.
is slightly south of breakeven heading into the session, with
the front-month contract last seen at $104.59 per barrel.
are lower, as well, with the malleable metal down 0.3% at
$1,646.60 an ounce.
In earnings news,
IBM Corp. (IBM - 207.45)
said its first-quarter profit improved 7.1% on a year-over-year
basis to $3.07 billion, or $2.61 per share. Excluding items,
operating earnings arrived at $2.78 per share, while revenue rose
0.3% to $24.67 billion. Analysts were calling for adjusted earnings
of $2.65 per share on $24.78 billion in sales. In the most recent
reporting period, short interest depleted 10.9%, and now accounts
for a low 1.1% of the stock's available float. Some of these short
sellers may be encouraged to climb back on board, with Big Blue
down 2.3% ahead of the bell.
Intel (INTC - 28.47)
banked a first-quarter profit of $2.74 billion, or 13 cents per
share, down 13% from its year-ago earnings. On an adjusted basis,
INTC earned 56 cents per share, while revenue increased 0.5% to
$12.9 billion. Wall Street was looking for a profit of 50 cents per
share on $12.84 billion in revenue. Ahead of last night's earnings,
options players were optimistically aligned toward the stock, with
INTC's Schaeffer's put/call open interest ratio (SOIR) of 0.69
ranking in the 9th percentile of its annual range. In other words,
short-term speculators are more call-heavy than usual toward the
equity. INTC is 3.1% lower in pre-market trading.
Yahoo (YHOO - 15.01)
reported an adjusted first-quarter profit of 24 cents per share,
while revenue rose 0.6% to $1.22 billion. Analysts, on average, had
expected a profit of 17 cents per share on revenue of $1.06
billion. Looking ahead, YHOO is forecasting total second-quarter
revenue of $1.17 billion to $1.29 billion, while Wall Street is
predicting sales of $1.08 billion. YHOO is looking at a 4% jump
right out of the gate. YHOO could struggle to overtake the $16
mark, as this strike is home to peak call open interest in the
front-month series of options.
Intuitive Surgical (ISRG - 545.53)
announced that its first-quarter profit ramped up 38% to $143.5
million, or $3.50 per share, as revenue jumped 28% to $495.2
million. The results sailed past analysts' consensus estimates for
earnings of $3.14 per share on $464 million in revenue. ISRG is set
to start the session with a 6% lead, which could prompt some of the
72% of brokers who maintain a "hold" or "sell" suggestion toward
the stock to change their tune.
Earnings and Economic Data
The usual report on
weekly crude inventories
is due out today, and Wall Street will also hear the latest
earnings from American Express (
), eBay (
), Yum Brands (
), Marriott (MAR), Bank of New York Mellon (BK), BlackRock (BLK),
Cubist Pharmaceuticals (CBST), F5 Networks (FFIV), Halliburton
(HAL), Huntington Bancshares (HBAN), Qualcomm (QCOM), SLM Corp.
(SLM), and VMware (VMW). Keep your browser at
for more news as it breaks.
On the other hand, European markets have turned lower at midday.
Spain remains a sore spot, after the country's central bank
reported that the ratio of bad loans on the books for the financial
sector tagged a 17-year high of 8.2% in February. Meanwhile,
utility issue Iberdola dropped after construction giant ACS
unloaded a 3.7% stake in the company. At last check, the French CAC
40 is down 1.6%, the German DAX is 1% lower, and London's FTSE 100
is off 0.2%.
Unusual Put and Call Activity:
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Open Interest Configurations
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