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S&P 500 Index Looks to Snap Its Two-Day Losing Streak

Posted
4/17/2012 8:30:00 AM
By: Schaeffer's Investment Research
Referenced Stocks:CBOE;IBM;INTC;JNJ;SPX

After opening above the 1,375 mark in yesterday's session, the S&P 500 Index ( SPX ) eventually settled south of breakeven, notching its second day of losses. However, traders will be eyeing this key supportive level, with futures on the broad-market index pointed north ahead of the bell. A few other indicators to keep on today's radar include:

Among equities in focus, options players were accumulating puts on U.S. Bancorp (USB ) ahead of earnings, while short sellers may be disappointed with Goldman Sachs' (GS ) first-quarter results.

And now, on to the numbers...

Dow, S&P and Nasdaq futures

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,039,464 call contracts traded on Monday, compared to 731,601 put contracts. The resultant single-session put/call ratio arrived at 0.70, while the 21-day moving average was 0.64.

NYSE and Nasdaq summary

Volatility indices

Currencies and Commodities

Currencies and commodities

In earnings news, U.S. Bancorp (USB - 31.16) said its first-quarter profit rose 28% on a year-over-year basis to $1.34 billion, or 67 cents per share. Revenue, meanwhile, improved 9.1% to $4.93 billion. The results beat analysts' expectations for a per-share profit of 64 cents on $4.78 billion in sales. Options players were a bit wary of USB ahead of earnings, with the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.98 ranking in the 89th percentile of its annual range. In other words, short-term speculators are more put-heavy than usual toward the security. USB is up 1.8% in pre-market trading.

Goldman Sachs (GS - 117.73) said its first-quarter profit declined 23% to $2.11 billion, or $3.92 per share, due to "relatively low" demand for investment banking services. Net revenue for the quarter was down 16% to $9.95 billion. Both figures surpassed consensus estimates, which called for a profit of $3.55 per share on $9.48 billion in revenue. Short sellers may have been a bit premature in reducing their bearish exposure by 19.6% in the past two reporting periods, with the stock down nearly 2% ahead of the bell. Short interest now accounts for a minute 1.2% of the stock's available float.

The Coca-Cola Company (KO - 72.44) reported a first-quarter profit of $2.05 billion, or 89 cents per share, an 8% improvement from last year's results. Revenue was also on the rise, increasing 6% to $11.14 billion. Wall Street forecast earnings of 87 cents per share on $10.82 billion in sales. In the 20 sessions prior to today's announcement, traders on the International Securities Exchange (ISE), Chicago Board Options Exchange ( CBOE ), and NASDAQ OMX PHLX (PHLX) had bought to open 1.44 calls for every put. KO is on pace to start the session with a 0.8% lead.

Earnings and Economic Data

Today's data features housing starts and building permits , as well as industrial production and capacity utilization. The earnings arena will see action from IBM ( IBM ), Intel ( INTC ), Johnson & Johnson ( JNJ ), Yahoo (YAHOO), Cree (CREE), State Street (STT), Intuitive Surgical (ISRG), Linear Technology (LLTC), and McMoRan Exploration (MMR). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Overseas Trading

European stocks have muscled higher at midday, even as Spanish bond yields remain inflated. Traders are cheering a surprise uptick in Germany's ZEW investor sentiment index, which logged its fifth consecutive monthly increase in April. At last check, the French CAC 40 has gained 1.3%, the German DAX has advanced 1%, and London's FTSE 100 is up 0.8%.

Overseas markets

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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