The Dow Jones Industrial Average (DJIA) slipped fractionally lower on Thursday, but remained above support at the 11,350 level. The blue chip barometer enters today with a positive bias, as DJIA futures are pointing toward a gain of roughly 25 points, when compared with fair value. What's more, the S&P 500 Index (SPX) is trading about 5 points above fair value. Talk of Chinese inflation and a potential rate hike from Beijing could take center stage today, after the People's Bank of China lifted the country's bank reserve ratio once again. Tenet Healthcare Corp. ( THC ) will also be in focus, after the company rejected a takeover offer from Community Health Systems ( CYH ).
Technically, the DJIA remains trapped in a trading range between support at the 11,350 level and overhead resistance in the 11,400 region. Look for these levels to continue to play a role in today's trading. As for the SPX, the broad market index is poised to set yet another two-year high today. Look for the index to threaten short-term resistance near 1,236, while support could materialize near 1,230.
In equity news, Community Health Systems has offered to buy Tenet Healthcare for $6 per share, or $7.3 billion - a premium of 40% over Thursday's closing price. Community Health's offer includes $5 per share in cash and $1 per share in common stock. Community Health announced the offer via press release after the close on Thursday, but it also said that Tenet rejected the bid three days ago.
On the earnings front, United Technologies ( UTX ) affirmed its outlook for 2010 and 2011. The company sees earnings of $4.70 per share on revenue of $54 billion in 2010, and earnings of $5.05 to $5.35 per share on revenue of $56 billion to $57 billion in 2011. Analysts estimate earnings of $4.72 per share on revenue of $54.26 billion in 2010, and $5.29 per share on revenue of $57.05 billion in 2011.
Elsewhere, National Semiconductor ( NSM ) reported a fiscal second-quarter profit of $83.5 million, or 34 cents per share, compared with a profit of $47 million, or 20 cents per share, for the year-earlier period. Revenue was $390.4 million, up from $344.6 million. Analysts had expected the chip company to report earnings of 32 cents per share, on revenue of $399.4 million. For the current quarter, the company said it expects revenue in the range of $344 million to $359 million. Analysts had expected sales of $381.9 million.
Finally, Green Mountain Coffee Roasters ( GMCR ) reported its fiscal fourth-quarter profit nearly doubled to $27 million, or 20 cents per share, from a year ago. Sales soared 73% to $373.1 million. Analysts had expected Green Mountain to earn 20 cents per share on sales of $359.7 million.
There are no major earnings reports slated for release today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
We round out the week today with November's import/export prices, December's University of Michigan consumer sentiment index, and November's Treasury budget.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,618,156 call contracts traded on Thursday, compared to 698,814 put contracts. The resultant single-session put/call ratio arrived at 0.43 while the 21-day moving average dropped to 0.56.
**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 mixed this morning, with six of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a gain of 0.19%. Asian stocks broadly declined on threats of inflation and the potential for an interest rate hike out of Beijing. Additionally, the People's Bank of China raised banks' reserve requirement ratio shortly after the close of trading. European markets are trading cautiously higher heading into midday trading, as investors digest the potential impact of further monetary tightening out of China.
Currencies and Commodities
The U.S. dollar is pulling aback this morning, as Asian inflation concerns and strong demand for yesterday's U.S. Treasury's 30-year bond auction sapped the greenback's strength. The U.S. Dollar Index continues to be squeezed between its 10-day and 20-day moving averages, and was last seen lower by 0.21% at 79.90. Crude futures are heading higher this morning, bolstered by a declining U.S. dollar. At last check, the January contract was up 51 cents at $88.88 per barrel. Finally, threats of inflation in Asia are weakening gold, with the malleable metal slipping $2.50 an ounce in London.
Unusual Put and Call Activity:
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