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Opening View: DJIA Futures Rise after G-20 Meeting
10/25/2010 7:55:00 AM
By: Schaeffer's Investment Research
The Dow Jones Industrial Average (DJIA) extended its fall rally to three weeks in a row last week, despite the blue chip barometer faltering on Friday ahead of the Group of 20 (G-20) finance ministers meeting. However, with G-20 officials agreeing to avoid currency devaluations, bulls appear to have returned to Wall Street. Specifically, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 65 points and 8.5 points above fair value, respectively. The Dow continues to battle short-term resistance at the 11,150 level, though support is firming in the 11,100 area. The DJIA is also staring up at the round-number 11,200 level, and its 2010 high at 11,258.01. The SPX, meanwhile, has short-term support at 1,180, with resistance in the 1,190-1,195 region.
On the earnings front, RadioShack Corp. ( RSH ) reported that its third-quarter profit rose 23% to $46 million, or 37 cents per share, as sales added 6.5% to $1.05 billion. Same-store sales rose 6.2%. Analysts were looking for earnings of 35 cents per share on sales of $1.03 billion.
Elsewhere, Office Depot ( ODP ) said that Chairman and CEO Steve Odland will resign on Nov. 1. Neil Austrian will serve as interim CEO and chairman while the board searches for a replacement. The company also said that it expects third-quarter earnings of 3 cents per share on revenue of $2.9 billion. The consensus is currently expecting a third-quarter loss of 2 cents per share on revenue of $2.9 billion.
Finally, General Electric Co. ( GE ) won a $750 million contract to expand an electric power station in Andhra Pradesh, India. The deal includes the sale of six Frame 9FA gas turbines, three D-11 steam turbines, training, and long-term services. "This will represent the largest gas turbine combined-cycle project in India's history and will help the country meet its continuing demand for reliable electricity to support its rapidly growing economy," GE said.
On the earnings front, M/I Homes Inc. ( MHO ), Sohu.com Inc. ( SOHU ), Atheros Communications Inc. (ATHR), SL Green Realty Corp. (SLG), and Texas Instruments Inc. (TXN) will release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
September's existing home sales arrive today, while the Case-Shiller home price index for August and October's consumer confidence index are on tap for tomorrow. On Wednesday, September's durable goods orders, September's new home sales, and the weekly report on U.S. petroleum supplies are slated for release. Thursday offers up the usual report on weekly initial jobless claims, while Friday rounds out the week with an advance look at third-quarter gross domestic product, October's Chicago purchasing managers' index, and the final reading for the October University of Michigan consumer sentiment index.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 967,911 call contracts traded on Friday, compared to 669,035 put contracts. The resultant single-session put/call ratio arrived at 0.69, while the 21-day moving average rose to 0.60.
**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.**
Overseas trading is in solid shape this morning, with eight of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a gain of 0.56%. Expectations for additional quantitative easing from the U.S. Federal Reserve and high hopes for strong quarterly corporate earnings provided lift for Asia, with traders finally returning to the table in the wake of the G-20 meeting. However, strength in the Japanese yen forced exporters lower. Across the pond in Europe, strong earnings and soaring metals prices are providing a bullish bias across the region.
Currencies and Commodities
With the G-20 meeting failing to come up with any firm policies or resolutions, the U.S. dollar resumed its decline versus most of its foreign competitors. The Japanese yen proved especially strong, rallying to a fresh 15-year zenith versus the greenback. At last check, the U.S. Dollar Index was down 0.76% at 76.89. Both gold and crude futures received a boost from the falling dollar, with gold jumping $18.40 to $1,343.50 an ounce in London, while the December crude contract has soared 88 cents to $82.57 per barrel in electronic trading.
Unusual Put and Call Activity:
Unusual Put and Call Activity:
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