The Dow Jones Industrial Average (INDEXDJX:.DJI) is bracing for a triple-digit drop right out of the gate, despite Congress passing a bill to keep the U.S. from defaulting on its debt. The resolution will fund the government through mid-January, and will raise the debt ceiling until early February. However, the temporary nature of the bill prompted China's Dagong Global Credit Rating Co. to downgrade its outlook for the U.S. to 'A-' from 'A.' Meanwhile, "It seems that the potential crisis has been averted, prompting the 10-year yields to creep back below the significant 2.7% level on Wednesday," noted Schaeffer's Senior Equity Analyst Bryan Sapp. "Going forward, I'll be keeping an eye on the S&P 500 Index's (SPX) former highs of 1,730."
On the economic front, a number of reports are still delayed due to the shutdown, but weekly jobless claims and the Philadelphia Fed's manufacturing survey will be released this morning. Also, earnings season heats up, with investors ready to digest results from notables such as eBay Inc (NASDAQ:EBAY), International Business Machines Corp. (NYSE:IBM), and Goldman Sachs Group Inc (NYSE:GS).
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are nearly 110 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,220,545 call contracts traded on Wednesday, compared to 659,086 put contracts. The resultant single-session put/call ratio fell to 0.54, while the 21-day moving average remained at 0.63.
From the Trading Floor
"Almost all of the recent sentiment reports that have surfaced this week point to growing skepticism," continued Sapp. "It seems that money managers are underinvested, and likely missed this recent bounce. This creates the potential for a performance chase into the end of the year."
Currencies and Commodities
Earnings and Economic Data
Today brings the regularly scheduled jobless claims and the Philadelphia Fed's manufacturing survey. Stepping up to the earnings plate are UnitedHealth Group (UNH), Verizon Communications (VZ), Google (GOOG), Advanced Micro Devices (AMD), Chipotle Mexican Grill (CMG), GS, Peabody Energy (BTU), Align Technology (ALGN), athenahealth (ATHN), Baxter International (BAX), BB&T Corporation (BBT), Blackstone (BX), Capital One (COF), Cypress Semiconductor (CY), Fairchild Semiconductor (FCS), Fifth Third Bancorp (FITB), Huntington Bancshares (HBAN), Intuitive Surgical (ISRG), Las Vegas Sands (LVS), Nucor Corporation (NUE), Philip Morris International (PM), Quest Diagnostics (DGX), SUPERVALU (SVU), Taiwan Semiconductor (TSM), Ultratech (UTEK), and Union Pacific Corporation (UNP).
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