Morning Market Update: Thursday, September 2, 2010
by Joseph Hargett (jhargett@sir-inc.com) 9/2/2010 7:54 AM
The Dow Jones Industrial Average (DJIA) soared 255 points on Wednesday, logging its best day since July 7 as hopes for a global economic recovery rose. Wall Street is carrying that positive bias over into the open this morning, even as traders prepare for the next wave of U.S. employment data and a look at July factory orders and new home sales. Ahead of these reports, futures on the DJIA and the S&P 500 Index (SPX) are trading 25 points and 2 points above fair value, respectively. The Dow comes into today trading back above support in the 10,250 region and its 50-day moving average. More stalwart support lies in the 10,150-10,100 region, while resistance could materialize near 10,350. As for the SPX, the index is currently capped by its 20-day and 50-day moving averages, with additional resistance in the 1,085 region. Support, meanwhile, lies in the 1,070 region.
In equity news, Hovnanian Enterprises (HOV) reported a narrower third-quarter loss of $72.9 million, or 92 cents per share, as revenue fell to $380.6 million. Analysts had forecast a loss of 47 cents per share on revenue of $396.1 million. Home-building gross margin, before interest expenses included in the cost of sales, rose 17.1% compared with 9.1% increase a year ago.
Elsewhere, Vimpelcom Ltd. (VIP) posted a net second-quarter profit of $334.7 million, or 28 cents per share, as revenue rose 23% to $2.64 billion. Wall Street was looking for a profit of $376 million and revenue of $2.60 billion.
Earnings Preview
On the earnings front, Del Monte Foods Co. (DLM) and H&R Block Inc. (HRB) will release their quarterly earnings reports today.
Economic Calendar
The weekly report on new jobless claims arrives today, along with July reports on factory orders and pending home sales. The hammer drops tomorrow, with the Labor Department’s numbers on nonfarm payrolls and the unemployment rate in August. The Institute of Supply Management (ISM) will also release its services index for August.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,223,245 call contracts traded on Wednesday, compared to 597,648 put contracts. The resultant single-session put/call ratio arrived at 0.49, while the 21-day moving average slipped to 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 has a positive 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 0.43%. In Asia, regional indexes were spurred higher by strong gains on Wall Street and a surprise rise in the U.S. Institute for Supply Management’s manufacturing index. Exporters in Japan helped lead the way higher, as the yen pulled back versus the U.S. dollar. However, European markets are headed lower this morning, as traders take profits ahead of key U.S. employment data.
Currencies and Commodities
With another round of economic data on tap later today, currencies and commodities traders are playing it safe. The U.S. Dollar Index has inched 0.15% lower to 82.40, as yesterday’s appetite for risk has yet to fully abate. Meanwhile, crude futures have slipped 23 cents to $73.68 per barrel, with traders concerned about a potential rise in weekly initial jobless claims. Finally, gold futures are little changed, rising $1.10 to $1,249.20 an ounce in London.
For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations.
