Dow Heads North On Caterpillar Results, Overseas PMI

Caterpillar Inc. (CAT) blew out third-quarter earnings expectations

Oct 23, 2014 at 8:36 AM

The Dow Jones Industrial Average (INDEXDJX:DJI) is headed sharply higher ahead of the bell, buoyed by a much better-than-expected earnings report from Caterpillar Inc. (NYSE:CAT). Also helping U.S. equities is strong purchasing managers index (PMI) data coming out of Europe and Asia. Looking ahead, Markit's flash PMI and the Conference Board's index of leading indicators are due out later this morning, while several firms are slated to report earnings after the close, including Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT).

Option buyers set their sights lower on Nokia Corporation (ADR) (NYSE:NOK), ahead of today's earnings report.
These biopharmaceutical stocks were among the market's biggest movers, following news related to their hepatitis C and Ebola drugs.
Option bulls targeted Cliffs Natural Resources Inc (NYSE:CLF), in the hopes of a short squeeze.

And now, on to the numbers...

Dow Jones Industrial Average, S&P and Nasdaq futures

Futures on the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) are nearly 175 points above fair value.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1.1 million call contracts traded on Wednesday, compared to 811,603 put contracts. The resultant single-session equity put/call ratio jumped to 0.74.

Currencies and Commodities

The U.S. dollar index is down fractionally at 85.73.
Crude oil has tacked on 0.2% to $80.70 per barrel.
Elsewhere, gold has shed 0.7% to $1,236.50 per ounce.

Earnings and Economic Data

Weekly jobless claims, the Conference Board's index of leading indicators, and Markit's flash PMI come out today. Several big-name companies will report earnings, such as MSFT, CAT, 3M (MMM), AMZN, Comcast (CMCSA), Eli Lilly (LLY), Dr Pepper Snapple (DPS), Dunkin Brands (DNKN), Juniper Networks (JNPR), Lorillard (LO), NOK, Southwest Airlines (LUV), Pandora Media (P), Potash Corp./Saskatchewan (POT), PulteGroup (PHM), Under Armour (UA), and United Continental (UAL). Also reporting will be Alexion Pharma (ALXN), American Airlines (AAL), American Electric (AEP), Coca-Cola Enterprises (CCE), Deckers Outdoor (DECK), GrubHub (GRUB), IMAX (IMAX), JetBlue Airways (JBLU), Piper Jaffray (PJC), Riverbed Technology (RVBD), and Union Pacific (UNP).

Overseas Trading

Stocks in Asia finished lower despite the HSBC flash manufacturing PMI hitting a three-month high of 50.4 in October, as factory output dropped to a five-month low, and energy companies throughout the region slid in sympathy with declining oil prices. By the close, Japan's Nikkei was down 0.4%, while Hong Kong's Hang Seng and South Korea's Kospi were each off 0.3%. China's Shanghai Composite paced the decliners, giving back 1%.

European bourses are mostly higher around midday, thanks to stronger-than-expected eurozone PMI figures and earnings data from Credit Suisse. Specifically, Germany's DAX and France's CAC 40 are both 0.3% higher. However, London's FTSE 100 has shed 0.3%.

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations.

Follow @Schaeffers

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released!