The Dow Jones Industrial Average (DJIA) reclaimed the 11,000 level yesterday, as Wall Street was encouraged by the Federal Open Market Committee's (FOMC) decision to leave interest rates steady at record lows. The Dow still has plenty of work ahead, as the venerable average is trading back below stiff resistance at the 11,150 level. This region put up a considerable fight prior to Tuesday's plunge, and could once again create turmoil for the Dow. The S&P 500 Index (SPX), however, remains below both the 1,200 level and its 20-day moving average. Heading into the open, it looks like market bulls are set on challenging these potential short-term hurdles, as futures on the DJIA and the SPX are trading about 60 points and 7 points above fair value. Finally, options activity on the Chicago Board Options Exchange (CBOE) showed little reaction to Tuesday's plunge. Specifically, the CBOE single-session equity only put/call volume ratio ticked slightly higher off its recent lows, but the 21-day moving average of this ratio remains at its lowest levels since we began tracking this data in September 2007.
Dominating headlines after the close last night, Hewlett-Packard Co. (HPQ) agreed to buy Palm Inc. (PALM) in a deal worth $1.2 billion. Hewlett said that Palm shareholders will receive $5.70 in cash for each share of common stock. The boards of both companies have reportedly approved the deal. Shares of PALM have rocketed more than 26% higher in pre-market trading, while HPQ is off fractionally.
In earnings news, Proctor & Gamble Co. (PG) said its fiscal third-quarter earnings were $2.6 billion, or 83 cents per share, with adjusted earnings coming in at 89 cents per share. Net sales were up 7% to $19.2 billion. Analysts were looking for earnings of 81 cents per share on sales of $19.5 billion. The company raised the low end of its fiscal 2010 profit guidance by 4 cents to a range of $4.06 to $4.12 per share. PG shares have slipped nearly 2% in pre-market trading, however.
Baidu Inc. (BIDU) reported that its first-quarter profit nearly tripled to about $70.4 million, or roughly $2.02 per share. Excluding one-time items, earnings came in at about $2.10 per share. Revenue increased 59.6% to $189.6 million. Analysts were looking for a profit of $1.50 per share. BIDU shares have spiked more than 15% in electronic trading.
Elsewhere, Visa Inc.'s (V) second-quarter profit rose 33% to $713 million, or 96 cents per share. Revenue jumped 19% to $2 billion. Wall Street was expecting earnings of 91 cents per share. V shares are off 0.35% in pre-market trading.
Finally, First Solar (FSLR) said that its first-quarter net income rose to $172.3 million, or $2 per share, as revenue arrived at $568 million. Looking ahead, the company expects 2010 earnings of $6.80 to $7.30 per share, including dilution of 9 cents to 10 cents per share for the pending acquisition of NextLight Renewable Power, LLC. FSLR has jumped more than 10% in electronic trading.
On the earnings front, Aetna Inc. (AET), Akeena Solar Inc. (AKNS), Colgate-Palmolive Co. (CL), ConocoPhillips (COP), Eastman Kodak Co. (EK), Exxon Mobil Corp. (XOM), Fortune Brands Inc. (FO), Kellogg Co. (K), Motorola Inc. (MOT), OfficeMax Inc. (OMX), Potash Corp. of Saskatchewan (POT), Chiquita Brands International Inc. (CQB), KLA-Tencor Corp. (KLAC), McAfee Inc. (MFE), and MEMC Electronic Materials Inc. (WFR) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.
The usual weekly initial jobless claims is on tap today, while Friday closes the week with an advance look at first-quarter gross domestic product, the April Chicago purchasing managers' index and the April University of Michigan consumer sentiment index.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,733,098 call contracts traded on Wednesday, compared to 917,543 put contracts. The resultant single-session put/call ratio arrived at 0.53, while the 21-day moving average held at 0.48.
**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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Recent XIV Action May Bode Well for Bulls
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