The Dow Jones Industrial Average (DJIA) closed out its worst August since 2001 with a huff on Tuesday, as traders appeared reluctant to take a firm stand ahead of this week's employment data. For the month, the DJIA plunged 4.3%, while the S&P 500 Index (SPX) dropped 4.7% in August. However, bolstered by stronger-than-expected economic data out of China and Australia, Wall Street appears ready to turn over a new leaf this morning, as futures on the DJIA and the SPX are trading roughly 91 points and 12 points above fair value, respectively. Keep in mind that the ADP private sector employment report is slated for release later this morning, so be prepared for Wall Street's reaction to the news. Checking the levels, the DJIA has support at 10,000 and 9,950, while resistance lingers overhead in the 10,100 area. As for the SPX, support resides at 1,040, while resistance appears to be growing in the 1,060 region.
In equity news, Joy Global Inc. ( JOYG ) reported a third-quarter net profit of $118.5 million, or $1.13 per share, as revenue fell 11% to $850 million. Analysts were expecting earnings of $1.02 per share on sales of $879 million. The company lifted its 2010 earnings forecast to a range of $4.10 to $4.15 per share, from its previous target range of $3.85 to $4 per share. Analysts had been expecting earnings of $4 per share for the year.
Finally, H.J. Heinz Co. ( HNZ ) reported first-quarter earnings of $240.4 million, or 75 cents per share, as revenue rose 1.6% to $2.48 billion. Analysts expected a profit of 73 cents per share on revenue of $2.53 billion. Looking ahead, the company projected earnings growth of 7%-10% for fiscal 2011.
Earnings Preview
On the earnings front, Charming Shoppes Inc. ( CHRS ), Collective Brands Inc. ( PSS ), and Hovnanian Enterprises Inc. ( HOV ) will release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.
Economic Calendar
The ADP report on private sector job growth in August kicks off three days of employment data later this morning. Also slated for release today are the Institute for Supply Management's ( ISM ) manufacturing index for August, the July construction spending report for July, and August's auto sales. We'll get the weekly report on new jobless claims on Thursday, along with July reports on factory orders and pending home sales. The hammer drops on Friday with the Labor Department's numbers on nonfarm payrolls and the unemployment rate in August. The ISM will also release its services index for August.
Market Statistics
Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 810,628 call contracts traded on Tuesday, compared to 602,813 put contracts. The resultant single-session put/call ratio arrived at 0.74, while the 21-day moving average rose to 0.64.
**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 looks solid this morning, as nine of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 1.08%. In Asia, stocks started September on a positive note, with traders bolstered by stronger manufacturing data out of China. Specifically, China's official purchasing managers' index rose to 51.7 in August from 51.2 in July. Meanwhile, Australia's gross domestic product rose by a better-than-expected 1.2% in the second quarter. The reports have had a buoying effect in Europe as well, with stocks trading broadly higher early in the session, with miners and financials taking the lead.
Currencies and Commodities
With traders moving back into the equities market following strong economic data out of China, the U.S. dollar has lost some of its safe haven appeal this morning. At last check, the U.S. Dollar Index was down 0.77% at 82.56. Commodities are taking advantage of the weaker dollar, with crude futures up 57 cents at $72.49, while gold has added $4.40 to trade at $1,254.70 and ounce in London.
Unusual Put and Call Activity:
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