Opening View: Bears Remain in Control; VIX Spiked 13 Percent on Wednesday

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The Dow Jones Industrial Average (DJIA) swung to its worst single-session loss since June on Wednesday, plunging 265 points as traders fled in the face of slipping global economic growth. The DJIA is now trading back below resistance in the 10,500 area, with potential support just below the venerable average at its 10-month moving average (at 10,378.6). Meanwhile, the S&P 500 Index (SPX) not only gave up support at its 200-day moving average, but the broad-market index also plunged below former support/resistance in the 1,090 region - site of the SPX's July 23 and July 30 lows. Heading into the open, even bargain hunters appear reluctant to jump back into the market, as futures on the DJIA and SPX are trading roughly 15 points and 4 points below fair value, respectively. Finally, the CBOE Market Volatility Index (VIX) broke back above its 200-day moving average, after spiking more than 13%. However, the VIX remains trapped below resistance at its 10-week trendline, which the fear index has not closed a week above since early June.

In equity news, Cisco Systems ( CSCO ) reported a fiscal fourth-quarter profit of $1.9 billion, or 33 cents per share, on revenue of $10.8 billion. Adjusted earnings were 43 cents per share. Analysts had expected the tech giant to report earnings of 42 cents per share, on revenue of $10.88 billion. CSCO shares were last seen down nearly 7.5% in pre-market trading.

Elsewhere, Kohl's Corp. ( KSS ) reported second-quarter earnings of $260 million, or 84 cents per share, with sales rising 7.7% to $4.1 billion. Wall Street was looking for a profit of 81 cents per share on revenue of $4.1 billion. Same-store sales for the quarter rose 4.6%. Looking ahead, the company expects a third-quarter profit in the range of 57 cents to 63 cents per share. Analysts expect third-quarter earnings of 74 cents per share. For the full year, Kohl's projected earnings to come in at a range of $3.57 to $3.70 per share.

Rounding out our equity coverage, Sara Lee Corp. ( SLE ) posted fiscal fourth-quarter net income from continuing operations of $115 million, or 17 cents a share. Net revenue rose 4.2% to $2.8 billion. Wall Street analysts expected earnings of 21 cents per share and revenue of $2.9 billion. For fiscal 2011, Sara Lee said it expects adjusted net income between 88 cents and 95 cents a share.

Earnings Preview

On the earnings front, The Estee Lauder Companies Inc. ( EL ), O'Charley's Inc. ( CHUX ), Royal Gold Inc. ( RGLD ), Wendy's/Arby's Group Inc. ( WEN ), Autodesk Inc. ( ADSK ), Nordstrom Inc. ( JWN ), NVIDIA Corp. ( NVDA ), and Red Robin Gourmet Burgers Inc. ( RRGB ) are scheduled to release their quarterly earnings report today. Keep your browser at for more news as it breaks.

Economic Calendar

The weekly report on initial jobless claims will be released this morning, as will July's import/export prices. Tomorrow, we get a peek at the latest inflation data, with the release of the consumer price index ( CPI ) and the core CPI reading. Also on the docket are July's retail sales, August's University of Michigan consumer sentiment index, and June's business inventories index.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,151,231 call contracts traded on Wednesday, compared to 883,147 put contracts. The resultant single-session put/call ratio arrived at 0.77, 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

Overseas trading remains in poor shape 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 loss of 0.48%. In Asian trading, Japan led a steep decline, as traders retreated in the wake of the yen's 15-month low versus the U.S. dollar. However, the region finished off session lows, after Rintaro Tamaki, Japan's vice finance minister for international affairs, told reporters he had met with a senior Bank of Japan official to discuss market conditions, including the yen's strength. Meanwhile, Chinese banking shares remained weak on concerns that Beijing might continue to rein in loan growth. Finally, European stocks are mixed, as traders attempt to regain their footing following yesterday's rout.

Currencies and Commodities

The U.S. Dollar Index has rallied back above support/resistance in the 82.50 region in Asian trading, where the dollar surged to a 15-month high versus the Japanese yen. Heading into the open, the index is up 0.32% at 82.56. In commodities, gold continues to rally despite the dollar's strength. In London, gold futures have added $7.10 to trade at $1,206.30 an ounce. Finally, crude prices continue to retreat in the face of global economic concerns. At last check, crude futures were off 82 cents at $77.20 per barrel.

Unusual Put and Call Activity:

The "Unusual Put and Call Activity Tables" that are usually included in this space are not available today. Earlier in the day, we inadvertently published out-of-date data in those tables. That data has since been removed. We apologize for any inconvenience.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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