Morning Market Update: Friday, September 3, 2010

Posted in Day Trading, Market News. Written by CTG.Admin on September 3rd, 2010

Futures on the Dow Jones Industrial Average (DJIA) are trading flat with fair value this morning, as Wall Street holds its breath ahead of this morning’s August nonfarm payrolls and unemployment rate. S&P 500 Index (SPX) futures are also indicating no change ahead of the report. Economists are expecting a decline of 105,000 jobs, with a net increase of 30,000 private-sector jobs. The unemployment rate is seen rising to 9.6%. Both the DJIA and the SPX come into today trading above their respective 50-day moving averages. Additionally, the Dow is facing support at 10,150 and resistance at 10,450, while the SPX should find a floor near 1,080 and a ceiling near 1,100. Finally, the CBOE Market Volatility Index (VIX) closed below its 200-day moving average on Thursday. VIX watchers should keep an eye on this trendline, as well as resistance near the 28-29 level, should today’s economic data disappoint.

In equity news, H&R Block Inc. (HRB) reported a first-quarter net loss from continuing operations of $114.8 million, or 36 cents per share, on revenue of $274.5 million. Analysts were expecting a loss of 41 cents per share on sales of $268.5 million.

Finally, Take-Two Interactive Software Inc. (TTWO) reported a surprise profit for the July quarter thanks to strong demand for “Red Dead Redemption” and other video game titles. For the third quarter, TTWO reported non-GAAP third-quarter earnings of $26 million, or 28 cents per share, as sales jumped more than 273% to $354.1 million. Analysts were expecting a loss of 9 cents per share on a non-GAAP basis on sales of $294.7 million.

Earnings Preview

On the earnings front, Campbell Soup Co. (CPB) will release its quarterly earnings report today.

Economic Calendar

The report Wall Street has been waiting for all week, with the Labor Department’s numbers on nonfarm payrolls and the unemployment rate in August, will arrive later this morning, as will the Institute for Supply Management’s services index for August.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,026,434 call contracts traded on Thursday, compared to 580,990 put contracts. The resultant single-session put/call ratio arrived at 0.57, while the 21-day moving average held at 0.63.

**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

Overseas trading is cautiously higher this morning, with seven of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a gain of 0.24%. In Asia, sentiment was boosted by an unexpected rise in U.S. pending home sales, while Japanese stocks extended their rally to three days on the strength in exporters. A rise in retail sales volumes in the euro zone is helping to buoy regional markets in Europe this morning, though activity remains muted ahead of unemployment and August jobs data in the U.S.

Currencies and Commodities

Currencies and commodities traders are playing it relatively close to the vest this morning, as few seem willing to take a stand ahead of the Labor Department’s report on nonfarm payrolls for August. The U.S. Dollar Index has slipped 0.11% to 82.38, extending a pullback that began on Wednesday when traders returned to the equities market. Gold has benefited from the decline in the greenback, with the malleable metal breaking out to a three-month high. This morning, gold futures are up $1.10 at $1,254.50 an ounce in London. Finally, crude prices are headed lower ahead of the jobs data, with the most active contract down 33 cents at $74.69 per barrel.

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.