After plunging 4.5% to its worst weekly loss since early May, the Dow Jones Industrial Average ( DJIA ) returns to a shortened trading week following a much needed three-day holiday. The Dow enters the week trading above potential support near 9,600 and below potentially stiff resistance at 9,800. For the year, the DJIA is down roughly 7%. Meanwhile, the S&P 500 Index ( SPX ) is clinging tenuously to support near 1,020, with psychological support at the 1,000 level just below. The broad-market index could run into trouble near 1,040, as this level was home to prior support in February, May, and June, and could switch roles to provide resistance. Heading into the open, it appears that Wall Street is set to join the rest of the globe in a rally, as futures on the DJIA and the SPX are trading about 60 points and 6 points above fair value, respectively. Finally, the CBOE Market Volatility Index ( VIX ) held above the 30 level and its 50-day moving average last week, signaling that volatility could still be trending higher.
Equity news is quite thin this morning, leaving Apple Inc.'s ( AAPL ) iPhone 4 issues in the headlines heading into the open. Specifically, Apple issued a statement on Friday in an attempt to explain the signal-reception issues with the newly released iPhone 4. According to the company, the problems stem from a software issue that causes the phone to over-report wireless signal strength.
Finally, Fidelity National Information Services ( FIS ) affirmed its second-quarter outlook for adjusted earnings in a range of 45 cents to 47 cents per share. The guidance surrounds the Wall Street estimate for a profit of 46 cents per share. The firm also said that it expects revenue for the quarter to have risen by low-single digits on a percentage basis compared with a year ago. Fidelity National also said it would buy back up to $2.5 billion in common shares to help finance $1.2 billion in new debt.
Earnings Preview
There are no earning reports scheduled for release today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
Economic Calendar
The June Institute for Supply Management's services index is slated for release this morning, while tomorrow offers up the weekly report on U.S. petroleum supplies, and Thursday brings the weekly report on U.S jobless claims and May's consumer credit report. Finally, we round out the week with May's wholesale inventories.
Market Statistics
Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 798,737 call contracts traded on Friday, compared to 479,143 put contracts. The resultant single-session put/call ratio arrived at 0.60, while the 21-day moving average held at 0.66.
**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.**
Todd Salamone, our Senior Vice President of Research, will talk about Trading Strategies for Today's Market when he hosts a live e-chat Tuesday, July 6, 2010, from 1-1:30 p.m. Sign up here for this free MoneyShow event.
Overseas Trading
Overseas trading looks impressive this morning, as all 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 1.85%. In Asia, the various markets bounced back from earlier weakness, as a strong rebound in Chinese stocks lifted sentiment. Shares in China outperformed their Asian peers this session, led by property and banking stocks, with the closing of subscriptions for Agricultural Bank of China's massive IPO helping to ease a liquidity squeeze. European stocks rose in early trading on Tuesday in a broad rally, with miners and banks among the top gainers, boosted by short covering after an almost uninterrupted two-week retreat. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .
Currencies and Commodities
A wave of bargain hunting has swept across the globe, taking commodities along for the ride. Heading into the open this morning, crude futures are up more than 1% at $72.92 per barrel. Meanwhile, gold has added $3.30 to trade at $1,211 an ounce in London. The U.S. dollar, however, has been left out of the rally, as traders move away from the dollar and back into riskier investments. At last check, the U.S. Dollar Index was down 0.34% at 84.32.
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 .
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