Bears are refusing to back down, with futures on the Dow Jones Industrial Average (INDEXDJX:DJI) lower on the heels of two consecutive triple-digit drops for the 30-stock index. This is setting up to be the first week this month that the blue-chip barometer logs a weekly loss. Retailers will remain in focus today following Wal-Mart Stores, Inc.'s (NYSE:WMT) dismal earnings report on Thursday, with J.C. Penney Company, Inc. (NYSE:JCP) positioned more than 18% higher in the wake of its first-quarter beat. Elsewhere, homebuilders should garner some attention, with housing starts and building permits on the day's economic docket.
Meanwhile, "Today is options expiration, so an unwinding of option positions may create erratic price action," said Schaeffer's Senior Options Strategist Tony Venosa, CMT. "Additionally, the SPDR S&P 500 ETF Trust (SPY) has huge peak put open interest at the 186 strike. This will be an important level to keep an eye on for the session."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are nearly 11 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,075,564 call contracts traded on Thursday, compared to 741,764 put contracts. The resultant single-session put/call ratio fell to 0.69, while the 21-day moving average moved higher to 0.63.
From the Trading Floor
"Downside momentum picked up on Thursday, as most of the broader indexes experienced immediate selling right at the open," noted Venosa. "By day's end, the S&P 500 Index (SPX) was off nearly 1%. The networking index closed in positive territory, thanks to a solid earnings report from tech giant Cisco Systems, Inc. (NASDAQ:CSCO). However, retailers were a drag, as WMT dropped nearly 2.5% on a disappointing earnings report."
Currencies and Commodities
Earnings and Economic Data
The week's economic calendar closes out with housing starts and building permits, as well as the preliminary Thomson Reuters/University of Michigan consumer sentiment survey for May. There are no earnings reports of note slated for today.
The Case for Big Moves in IWM and QQQ
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