The Dow Jones Industrial Average ( DJIA ) cooled its heels yesterday, as traders digested Monday's impressive gains. Both the DJIA and the S&P 500 Index ( SPX ) held key support at their respective 200-day moving averages, lending credence to the belief that the recent bull market correction may finally be over. Heading into the open, the DJIA and the SPX are trading roughly 36 and 4 points above fair value, respectively, though there is a flood of economic data between now and the open that could impact these readings. On the upside, look for the DJIA to meet with resistance near 10,500, which is a 50% retracement of the Dow's April 26 high and June 8 low, while support is emerging near 10,350 on a short-term basis, and 10,200 on an extended decline. The SPX faces a similar set-up, with resistance at a 50% retracement of its April 26 high and May 25 low near the 1,130 level, while short-term support resides at 1,110, and 1,090 should a steep sell-off emerge.
In earnings news, Smithfield Foods Inc. ( SFD ) said it lost $4.6 million, or 3 cents per share, in the fiscal fourth quarter, as sales rose to $2.91 billion. Excluding items, Smithfield would have earned 18 cents per share. Analysts were looking for a profit of 16 cents per share on sales of $2.88 billion. The company also announced that it has made an offer to purchase the remaining interest in Butterball, LLC for approximately $200 million.
Finally, Pier 1 Imports ( PIR ) reported first-quarter net income of $7.7 million, or 7 cents per share. Wall Street was expecting a loss of 2 cents per share. Pier 1 said that sales for the quarter rose to $306.3 million, from $281.1 million.
Earnings Preview
On the earnings front, The J.M. Smucker Co. ( SJM ) and The Kroger Co. ( KR ) are slated to report their quarterly figures today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
Economic Calendar
The economic calendar will be chock full of data today, with traders getting a look at initial jobless claims, the May Consumer Price Index ( CPI ) and core CPI, the Conference Board's leading indicators index for May, and the Philadelphia Fed Index for June. Friday closes with no major economic reports.
Market Statistics
Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,142,680 call contracts traded on Wednesday, compared to 764,352 put contracts. The resultant single-session put/call ratio arrived at 0.67, 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.**
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Overseas Trading
Overseas trading is in fine shape this morning, as eight of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.39%. In Asia, markets remained range-bound. European shares are higher at for the seventh session in a row, after a key Spanish bond auction eased fears over the euro zone debt crisis and boosted banking shares. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .
Currencies and Commodities
The U.S. dollar is weakening this morning, as traders in Europe cheer what is being called a relatively successful bond auction by Spain. The boost to investor sentiment has rallied the euro, sending the U.S. Dollar Index lower by 0.44% to 85.71 in pre-market trading. The decline in the dollar is turning out to be a boon for gold, with the lead contract jumping $7.80 to $1,238.30 an ounce in London. Finally, crude futures are edging tentatively higher on the positive data from across the pond, with the front-month contract adding 9 cents to $78.81 per barrel.
Unusual Put and Call Activity:
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