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Opening View: DJIA Futures Waver as Moody's Downgrades Ireland
By: Schaeffer's Investment Research
The Dow Jones Industrial Average (DJIA) rallied 41 points on
Thursday, but stopped just shy of the 11,500 mark, as overseas
concerns overshadowed strong domestic economic data. What's more,
we could be looking at a repeat performance this morning, as
futures on the DJIA and the S&P 500 Index (SPX) are trading
roughly 4 points and 1 point below fair value, respectively. Wall
Street has reacted with trepidation to news that Moody's Investors
Service cut Ireland's credit rating by five notches to Baa1 from
Aa2, with a negative outlook. What's more, many traders are
disappointed with the European Union's response to euro-zone debt
issues following a two-day summit. However, the market may get a
lift from passage of the tax cut in the U.S. House. That package
now goes to President Obama for his signature.
Technically, the 11,500 level remains a significant hurdle for the DJIA, with 11,550 the next potential sticking point for the blue chip barometer. Support should manifest in the 11,400-11,450 area. The SPX, meanwhile, has support in the 1,230-1,235 area, which is also home to its 10-day moving average. Resistance remains firms at the 1,245 level.
In equity news, Oracle Corp. ( ORCL ) posted a second-quarter profit of $1.87 billion, or 37 cents per share, as revenue jumped 47% to $8.6 billion. Excluding one-time items, Oracle said earnings for the period were 51 cents per share. Analysts were looking for earnings of 46 cents per share on $8.3 billion in revenue.
Also, Research In Motion Limited ( RIMM ) said that its third-quarter earnings soared 45% due to strong BlackBerry sales. For the quarter, RIMM earned $911.1 million, or $1.74 per share, as revenue soared 40% to $5.49 billion. Analysts were expecting earnings of $1.64 per share on revenue of $5.4 billion.
Finally, Take-Two Interactive Software ( TTWO ) reported net income of $53.8 million, or 58 cents per share, in the latest quarter. On a non-GAAP basis, earnings from continuing operations would have been $64 million, or 67 cents per share. Revenue rose 32% to $373.7 million. Analysts were expecting earnings of 31 cents per share on revenue of $325.2 million.
There are no major earnings reports slated for release today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
The flood finally abates today, with only the Conference Board's leading indicators for November slated for release
Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,581,687 call contracts traded on Thursday, compared to 777,076 put contracts. The resultant single-session put/call ratio arrived at 0.49 while the 21-day moving average slipped to 0.53.
**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 struggling this morning, as only three of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.09%. Asian traders fretted over the possibility for more tightening measures out of Beijing. Taiwanese stocks, however, were a standout, soaring to a fresh 31-month high. European markets initially headed higher, but have since turned lower heading into midday activity, after Moody's Investors Service cut Ireland's credit rating. Also weighing on European stocks was disappointment over the European Union's response to the region's debt crisis.
Currencies and Commodities
The U.S. dollar is headed lower in premarket trading, as the potential for tightening monetary policy in China and Moody's downgrade of Ireland is creating stiff headwinds for the greenback. At last check, the U.S. Dollar Index was down 0.52% at 79.77. That said, commodities are not benefiting from the weakening dollar, with crude futures adding a mere 4 cents to $88.44 per barrel. Also, gold futures are hovering just above breakeven, with the December contract up $2.60 at $1,373.60 an once in London.
Unusual Put and Call Activity:
Unusual Put and Call Activity:
Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.