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5/20/2010 11:46:38 AM
The Dow Jones Industrial Average ( DJIA ) could be in trouble this morning, as the venerable average closed below short-term support in the 10,450 region. Furthermore, the Dow appears poised to open sharply lower this morning, with DJIA futures trading roughly 92 points below fair value. Such a plunge on the open would place the Dow near 10,350-10,300 - the average's lows for the week. Meanwhile, the S&P 500 Index ( SPX ) gave up key support at its 160-day moving average yesterday, testing support in the psychologically important 1,100 level in the process. In pre-market trading, SPX futures are trading nearly 13 points below fair value, indicating that the index could be on its way to yet another test of the 1,100 region. Finally, the CBOE Market Volatility ( VIX ) index is up nearly 10% this week, despite its already elevated levels. The VIX took out the 35 area yesterday, and could make a run at 40 if the market follows pre-open indications.
In earnings news, Staples Inc., ( SPLS ) reported first-quarter net income of $188.8 million, or 26 cents per share. On an adjusted basis, earnings were 28 cents per share. Wall Street was looking for a profit of 26 cents per share on $6.03 billion in sales. For the second quarter, Staples expects to earn 18 cents to 20 cents per share on an adjusted basis, with full-year earnings seen at $1.25 to $1.33 per share on the same basis. Analysts are expecting second-quarter and full-year earnings of 20 cents per share and $1.33 per share, respectively.
Sears Holdings ( SHLD ) that its first-quarter profit fell to $16 million, or 14 cents per share, on promotional markdowns and reduced margins in home appliances. Revenue was virtually flat at $10.05 billion. Comparable-store sales grew 1.7% at Kmart and 1.2% at Sears domestic. On an adjusted basis, Sears' profit would have been 16 cents per share. Analysts were expecting earnings of 12 cents per share on sales of $10.22 billion.
Finally, Limited Brands Inc. ( LTD ) reported a first-quarter profit of $112.5 million, or 34 cents per share, with sales rising to $1.93 billion. Excluding a one-time gain, earnings came to 25 cents per share. Analysts were looking for a profit of 19 cents per share on sales of $1.92 billion. In pre-market trading, LTD was last seen lower by 2%.
On the earnings front, Dollar Tree Inc. ( DLTR ), GameStop Corp. ( GME ), Ross Stores Inc. ( ROST ), Tidewater Inc. ( TDW ), Aeropostale Inc. ( ARO ), Brocade Communications Systems Inc. ( BRCD ), Dell Inc. ( DELL ), salesforce.com inc. ( CRM ), and Marvell Technology Group Ltd. ( MRVL ) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.
Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,591,057 call contracts traded on Wednesday, compared to 1,302,425 put contracts. The resultant single-session put/call ratio arrived at 0.82, while the 21-day moving average rose to 0.61.
**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.**
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Overseas trading is in poor shape this morning, as only one of the 10 foreign indexes that we track is in positive territory. The cumulative average return on the collective stands at a loss of 0.67%. In Asia, stocks retreated as political divisions in Europe and fears of more market regulation kept investors nervous and pressured stocks. In Europe, banks shares experienced a modest bargain-hunting rally after the previous session's 3% drop, but the rebound was tempered by uncertainty over market regulation and high volatility. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .
Currencies and Commodities
Crude futures are making headlines this morning, with black gold falling to its lowest levels since February. Heading into the open, the July contract is down 59 cents at $71.89 per barrel. Strength in the U.S. dollar has been at least partly responsible for crude's decline. The U.S. Dollar Index is up only 0.24% at 86.60 this morning, but the index is trading less than one point away from an annual high - which was set early on Wednesday. Finally, gold prices continue to drop sharply. The malleable metal gave up psychological support at the $1,200 level yesterday, and has fallen more $9 to hover at $1,183.80 an ounce in London this morning.
Unusual Put and Call Activity:
Unusual Put and Call Activity: