TODAY’S S&P 500 SET-UP - October 26, 2010

As we look at today’s set up for the S&P 500, the range is 11 points or -0.64% downside to 1178 and 0.29% upside to 1189.  Equity futures are trading below fair value having closed higher on Monday in what was an otherwise quiet start to the week. Today sees steady flow of corporate earnings, including Dupont, Bristol-Myers and US Steel. In economic releases, Conference Board Consumer Confidence, Aug Case/Shiller Home Prices plus the FHFA House price index are center stage.

  • Amgen (AMGN US) reaffirmed 2010 guidance; 3Q rev., adj. EPS beat est.
  • Berkshire Hathaway (BRK/B) hired Castle Point Capital Mgmt’s CEO Todd Combs to manage a “significant portion” of the investment portfolio
  • Digital River (DRIV) 3Q rev. beats, sees 4Q rev. above est.
  • Edwards Lifesciences (EW) sees 2010 rev. $1.435b-$1.455b vs est. $1.44b, had seen bottom $1.43b-$1.50b   
  • Plum Creek Timber (PCL) sees 2010 EPS cont. ops $1.28-$1.35, had seen $1.35-$1.50 in July vs est. $1.46
  • Prologis (PLD) plans to lower its quarterly div. to 11.25c-shr
  • Rent-A-Center (RCII) exploring strategic alternatives with respect to its financial services business, may include sale or divesture of such business
  • Synovus Financial (SNV) 3Q loss 25c-shr vs est. loss 22c
  • Texas Instruments (TXN) sees 4Q rev. $3.36b-$3.64b, est. $3.52b; 4Q adj. EPS 59c-67c, est. 63c
  • Veeco Instruments (VECO) sees 4Q adj. EPS $1.46-$1.74 vs est. $1.45, sees 4Q rev. $285m-$320m vs est. $316m
  • Williams (WMB) boosted its quarterly dividend payout to 68.75c- shr from 67.25c-shr


  • One day: Dow +0.28%, S&P +0.21%, Nasdaq +0.46%, Russell +0.63%
  • Month/Quarter-to-date: Dow +3.49%, S&P +3.89%, Nasdaq +5.16%, Russell +4.7%
  • Year-to-date: Dow +7.06%, S&P +6.32%, Nasdaq +9.77%, Russell +13.19%
  • Sector Performance: Materials +1.73%, Consumer Discretionary +0.56%, Healthcare +0.47%, Telecom +0.37%, Tech +0.27%, Industrials +0.2%, Consumer Staples +0.17%, Energy +0.1%, Utilities (0.32%), and Financials (0.41%)


  • VOLUME: NYSE: 1007.37 (+30.32%)
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: Advance Micro +5.37%, Eastman +5.08% and Dow Chemical +4.50%/Radioshack -9.04%, Avon -4.10% and Legget & Platt -3.43%.
  • VIX: 19.85 +5.70% - YTD PERFORMANCE: (-8.44%)
  • SPX PUT/CALL RATIO: 1.91 from 1.06 +80.63%


  • TED SPREAD: 17.18 -0.203 (-1.169%)
  • 3-MONTH T-BILL YIELD: 0.14% +0.01%   
  • YIELD CURVE: 2.22 from 2.24


  • CRB: 300.31 +1.04%
  • Oil: 82.51 +1.02% - BULLISH
  • COPPER: 386.30 +1.74% - OVERBOUGHT
  • GOLD: 1,335.45 +0.86% - BULLISH


  • EURO: 1.3961 +0.05% - BULLISH
  • DOLLAR: 77.103 -0.48%  - BEARISH



European markets:

  • FTSE 100: (0.62%); DAX (0.11%); CAC 40 (0.49%)
  • Major indices were weaker with the Basic Resource sector hit by a cautious outlook statement issued by ArcelorMittal with banks down despite UBS reporting a return to positive net money flows at its private bank.
  • Sweden's central bank raised its repo rate by a quarter of a percentage point to 1%
  • UK Q3 prelim GDP +0.8% q/q vs cons +0.4%
  • France Oct Consumer Confidence (34) vs cons (36)  

Asian markets:

  • Nikkei (0.25%); Hang Seng (0.11%); Shanghai Composite (0.32%)
  • Markets closed mostly lower in fairly quiet trading.
  • Japan opened slightly lower on a strong yen, turned positive in the afternoon but ended in the red.
  • Investors, however, seemed to be waiting for earnings reports later this week.
  • Tech stocks were mostly lower in South Korea although the market was flat.
  • Financial stocks retreated in Australia after making gains yesterday on M&A news
  • Japan Sep corporate services price index (1.1%) y/y, (0.1%) seq. 
Howard Penney
Managing Director

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