Pre-Market Rundown: Job Claims Down, Banks Rebound

Stocks are set to open higher following upbeat news from the financial sector. About an hour before the opening bell on Wall Street, stock index futures indicate that the Dow Jones Industrial Average might gain more than 120 points at the open. The NASDAQ is indicated 20 points higher.

Stock index futures rallied at 8:00 a.m. Eastern Time after Wells Fargo (WFC) said it expects to post record earnings in the first quarter. The bank said it will post $3 billion, or 55 cents per share and well above consensus estimates of 23 cents.

Wells Fargo (WFC) is up 28.6 percent to $19 per share. Dow components BofA (BAC), Citi (C), and JP Morgan (JPM) are all seeing solid gains in pre-market trading.

Wal-mart (WMT) shares are down 5 percent, however, after the retailer said it expects first quarter earnings of 76 cents, compared to analyst estimates of 72 and 77 cents. Wal-mart also said same store sales, excluding fuel, rose 1.2 percent last month. Analysts were looking for a 3.3 percent increase.

Textron (TXT) is up nearly 50 percent on news a consortium of overseas investors is interested in acquiring the company.

On the economic front, the latest weekly jobless claims numbers were a bit better than expected. According to the Labor Department, filings for jobless benefits fell by 20,000 to 654,000 last week. Economists were looking for a decline 660,000.

Bonds are lower on the jobless claims numbers and as banks rebound. The benchmark ten-year Treasury note is down 12/32nd and yields 2.9 percent.

The dollar gained .67 to 100.39 on the yen. The euro is up .0031 to 1.3280 on the buck.

Crude oil rose $1.59 to $50.97 a barrel. Gold fell $7.50 to $878.40 an ounce.

Trading was light in the options market Wednesday, as the major averages chopped around and finished with modest gains. The Dow Jones Industrial Average added 47 points on the day. The CBOE Volatility Index (.VIX) fell 1.50 to 38.89 and approximately 7.1 million calls and 5.3 million puts traded across the options exchanges.

Gap Stores (GPS) calls were actively traded for a second day. April 15 calls saw open interest increase by 13,100 contracts following active trading Tuesday. Wednesday, shares gained 43 cents to $14.41 and options volume rose to 4X the usual levels. 17,000 calls and 2,700 puts traded. A lot of the activity was in May and June 15 calls, where 12,200 traded and about 94 percent of the volume traded ask-side of the bid-ask spread. Open interest increased in both contracts, by about 9000 total, suggesting opening call buying in GPS.

Bullish trading was also seen in NetApp (NTAP), Teck Cominco (TCK), and Shanda Interactive (SNDA).

Raymond James (RJF) shares fell $1.82 to $16.08 after Friedman Billings analysts cut the stock to Underperform from Market Perform Wednesday. The firm says RJF faces credit headwinds, margin pressure, and weaker commission revenues. RJF options activity picked up to 3X the normal levels. 5,700 puts and 1,400 calls traded. May 15 puts were the most actives, with 4,300 traded and 77 percent of that volume trading ask-side of the bid-ask spread. Open interest increased by 3000.

Bearish trading also surfaced in Micron Technology (MU), and Ingersoll Rand (IR) and the PHLX Australian Dollar Index (.XDA).

Comments

[the_feds_co...:]

If these banks are doing so well then why is the government stealing taxpayer money and giving it to banks interest free to make more money at taxpayer expense!? Someone is lying here. The government has no right to steal our money and give it to any business! Where in the constitution does it say that ?This entire scam of giving money to business is outrageous and criminal! When will
these crooks and thieves in Washington DC stop!?

Apr 09 09:51 AM