The Dow Jones Industrial Average (INDEXDJX:.DJI) is pointed modestly lower ahead of the bell, as concern grows over a possible government shutdown. The U.S. Congress has until Oct. 1 to approve a proposal to raise its borrowing limit. On the economic front, personal income and spending data and the latest consumer sentiment index are both on tap. Additionally, a handful of Federal Reserve officials are slated to take the stage throughout the day.
"I'm keeping a close eye on the 10-year Treasury yield," noted Schaeffer's Senior Trading Analyst Bryan Sapp. "Prior to falling below it on the 'no taper' news, the 2.7% yield level was a very significant floor. Since last week, the 10-year note has broken down, and is now rallying back into that same pivotal area. Should rates spike going forward, I would be looking for another move back to 3% or so."
Futures on the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) are 40 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,372,332 call contracts traded on Thursday, compared to 668,252 put contracts. The resultant single-session put/call ratio dropped to 0.49, while the 21-day moving average stayed at 0.57.
From the Trading Floor
"The new American Association of Individual Investors (AAII) numbers came out yesterday, and there was a significant drop in bullishness," continued Sapp. "It's funny how even minor pullbacks can get everyone out of the bull camp. We're only 2% off all-time highs, and there was a big knee-jerk reaction in the data. This shows continued disbelief toward the current rally."
Currencies and Commodities
Earnings and Economic Data
The week's economic calendar finishes off with personal income and spending data and the Thomson Reuters/University of Michigan consumer sentiment index. Earnings reports are due out from BlackBerry (BBRY) and Finish Line (FINL).
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