The Dow Jones Industrial Average (DJIA) rallied 3.1% in October, despite stagnating near the end of the month. Unfortunately, the reasons for this stagnation have yet to pass, with the midterm elections taking place tomorrow, and the Federal Open Market Committee's (FOMC) decision on monetary policy, interest rates, and quantitative easing arriving on Wednesday. However, solid manufacturing data out of China has broken the stalemate in premarket trading, with futures on the DJIA and the S&P 500 Index (SPX) trading roughly 47.5 points and 6.7 points above fair value, respectively. What's more, domestic manufacturing data will arrive later this morning, in the form of the Institute for Supply Management's ( ISM ) manufacturing index for October. However, don't expect the DJIA to stray outside support at 11,050 and resistance at 11,200. The SPX should be similarly constrained between 1,190 and 1,180.
In earnings news, Humana Inc. ( HUM ) said that its third-quarter net profit rose 30% on a year-over-year basis to $393.2 million, or $2.32 per share, as revenue climbed 9.2% to $8.42 billion. Analysts had been expecting earnings of $1.67 per share on revenue of $8.43 billion. Humana said it now expects fiscal 2010 earnings of between $6.40 and $6.50 per share, versus analysts' expectations for a profit of $6.28 per share.
Elsewhere, Loews Corp. ( L ) reported that its third-quarter net income fell 92% to $36 million, or 9 cents per share. Adjusted earnings were $364 million compared with $468 million. The latest results reflect a charge for a transaction under which Loews's CNA Financial (CAN) unit ceded certain legacy environmental-related liabilities to National Indemnity Co.
Finally, Baker Hughes Inc. ( BHI ) reported that its third-quarter earnings tripled to $255 million, or 59 cents per share, from $55 million, or 18 cents, in the year-earlier period. Revenue rose 83% to $4.08 billion from $2.23 billion. Wall Street was looking for a profit of 47 cents per share on revenue of $3.68 billion.
On the earnings front, Allergan Inc ( AGN ), Cooper Tire & Rubber Co. (CTB), Corning Incorporated (GLW), IntercontinentalExchange Inc. (ICE), American Financial Group (AFG), Anadarko Petroleum Corp. (APC), and Evergreen Solar Inc. (ESLR) will release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
We begin the week with reports on September personal income and spending, construction spending, and the Institute for Supply Management's ( ISM ) manufacturing index for October today. Tomorrow is devoid of economic reports, though it is election day, so get out there and vote. The big news on Wednesday will likely be the Federal Open Market Committee's decision on monetary policy and interest rates. Also on tap for Wednesday are the ISM's services index for October, October auto sales, September factory orders, and the weekly report on U.S. petroleum supplies. The weekly initial jobless claims report comes out on Thursday, and we round out the week with October's nonfarm payrolls and unemployment rate.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,231,552 call contracts traded on Friday, compared to 685,314 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average held at 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 has a bullish bias this morning, as seven of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.72%. In Asia, regional indexes rallied in the wake of surprisingly strong manufacturing data from China. Meanwhile, the Bank of Japan pushed its next meeting forward from mid-November to Nov. 4-5, in a move seen as a precaution in case Japan's central bank needs to respond to the U.S. Fed's action. Meanwhile, European markets are trading flat, as traders remain in a holding pattern ahead of U.S. elections and the Fed's decision on monetary policy.
Currencies and Commodities
The U.S. dollar dipped lower in Asian trading, giving back all of its earlier gains versus the Japanese yen. Earlier in the session, there had been speculation in the currency pits that Japan would intervene on behalf of the yen once again, pushing the greenback higher against the yen. However, with the Federal Open Market Committee's meeting coming to a close on Wednesday, the U.S. Dollar Index is headed lower once again, slipping 0.08% to 76.97. Commodities, which typically trade inversely to the dollar, have found some lift this morning, with crude futures up 79 cents at $82.22 per barrel, while gold futures have added $5.40 to $1,363 an ounce in London.
Unusual Put and Call Activity:
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