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Sunday, October 17, 2010 9:02:39 PM
Monday Morning Outlook: DJIA Solidifies Hold on 11,000
Investors may be waiting on midterm elections, Fed action
by Todd Salamone 10/16/2010 11:21 AM
http://www.schaeffersresearch.com/commentary/observations.aspx?ID=102925
The Dow Jones Industrial Average inched ahead this past week, thanks to a modest rally on Wednesday, and maintained its perch north of 11,000. Looking ahead, Todd Salamone, Senior Vice President of Research, sees evidence that hedge funds are moving back into the market, which he interprets as bullish, but also warns of potentially stiff technical resistance just above current levels. Next, Senior Quantitative Analyst Rocky White examines the money flowing into (and out of) equity mutual funds and bond funds. Not to keep you in suspense, but investors are fleeing equities and parking their money in bonds. Rocky concludes that this adds up to "a huge amount of sideline money with the potential to propel this market higher." Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.
Recap of the Previous Week: 'A Case for Further Action'
Schaeffer's Editorial Staff
The fall rally slowed to a walk this week. Earnings reports were cheery enough, but with the midterm elections just over two weeks away, investors may have checked into wait-and-see mode. They're also waiting on the Federal Reserve to disclose exactly what it plans to do to reboot the economy. Chairman Ben Bernanke clearly signaled that intent in a major speech on Friday, when he said "there would appear ... to be a case for further action," but he didn't spell out any details. Fed action is expected after the election.
The beginning of the week was nearly comatose. The Dow gained a barely measurable 0.03% on Monday, and another 0.09% Tuesday, for a combined advance of 14 points. The minutes from the latest meeting of the Federal Open Market Committee (FOMC), released Tuesday afternoon, were the only apparent news driver. Those minutes disclosed that the Fed is considering another round of quantitative easing, which was not exactly stop-the-presses news. More sobering: Fed staff trimmed their growth targets for 2010 and 2011.
Wednesday's session was far more lively, as earnings season heated up and the Street was cheered by upbeat results in three key sectors. Banking giant JPMorgan Chase & Co. (JPM), railroad company CSX Corp., (CSX) and the chip maker Intel Corp. (INTC) all wowed investors with better-than-expected results. The Dow spent much of the day in triple-digit gain territory above 11,100, but eventually settled for a very satisfactory 76-point win, or 0.69%, and finished at 11,096.
The high spirits were quickly dashed by a round of disappointing economic data Thursday, including an unexpected rise in jobless claims, and renewed pressure on the banking sector. The foreclosure crisis, which had been festering for months, came to a head this week after 50 state attorneys general announced they were investigating the practices of the mortgage servicing industry. Banking stocks tumbled. Although the bulls spent much of the day in retreat, the Dow pared most of its losses late in the afternoon. When the smoke cleared, the Dow had dropped an imperceptible 0.01%.
Gloom continued to hang over the banking sector on Friday. That mood was echoed by a small decline in the University of Michigan consumer sentiment survey, and a disappointing revenue report for General Electric Co. (GE). The gloom clearly outweighed the good news: Google (GOOG) reported smashing earning, lifting techs; retail sales were strong; and the Fed's Bernanke confirmed that the central bank is studying another round of quantitative easing. The Dow shed 0.29% for the session, but the Nasdaq Composite (COMP) climbed a healthy 1.37%. For the week, the Dow managed a 0.5% gain, the S&P 500 Index added 0.9%, and the COMP took the week's honors by advancing 2.8%.
What the Trading Desk Is Expecting: Are Hedge Funds Coming Back?
By Todd Salamone, Senior Vice President of Research
"One notable difference that we are seeing now relative to the two prior ventures into the 1,120-1,130 area (on the SPX) since June is indications that hedge funds are seeing value around current levels. This was not even close to being evident in June and early August, according to our option activity analysis... This would suggest to us a higher-probability chance of a breakout, as investors with an investment time frame beyond a day or week counter the actions of day traders and high-frequency traders playing the short-term, mean-reversion game."
--Monday Morning Outlook, Sept. 18, 2010
"...we continue to see evidence of hedge fund accumulation via our analysis of buy-to- open put volume on two of the three broader exchange-traded funds that we track. In addition, expiration of traditional options is only two weeks away. In the absence of an event that triggers a sell-off in equities, we could see another short-covering rally related to out-of-the-money put options expiring in the next 10 trading days."
-- Monday Morning Outlook, Oct. 2, 2010
"Hedge Fund Investors Turn Bullish on Stock Market"
--Reuters headline, Oct. 13, 2010
Regular readers of Monday Morning Outlook may not be surprised by the Reuters headline. In our analysis of buy-to-open option activity on major exchange-traded funds (ETFs), the increasing put volume relative to call volume amid market strength was, and continues to be, a strong indication that hedge funds are in accumulation mode. With retail mutual fund investors largely disengaged from the stock market, it is likely that hedge fund managers are dictating the market's direction.
Therefore, the buy-to-open put/call volume ratio on ETFs such as the SPDR S&P 500 ETF Trust (SPY), iShares Russell 2000 Index Fund (IWM), and PowerShares QQQ Trust (QQQQ), continues to be one of our main focuses as we move through earnings season and into other market-moving events in early November, such as the midterm elections and the Federal Open Market Committee meeting.
Of particular interest is that hedge fund managers could be in the early stages of equity accumulation, after an absence that lasted from May through much of August. Per the chart below, note how low the 20-day buy-to-open put/call volume ratio was prior to turning higher at the beginning of September. Our theory is that the lower this ratio, the less exposed hedge funds are to equities (and vice versa when the ratio is high). So, even though we are seeing evidence that hedge funds are becoming more bullish, the ratio is not at levels that would suggest they are "over-the-top" bullish, suggesting there is a healthy degree of buying power from this group at present.
Daily SPX chart since January 2009 with 20-day BTO put/call ratio for the SPX, QQQQ, and IWM
Some professional traders continue to express caution as it relates to the current level of the CBOE Market Volatility Index (VIX) and the term structure of VIX futures. This concern – which has been apparent in the market for weeks - suggests that there is still the potential for short covering, the unwinding of hedges, or sideline money that can drive stocks higher.
Additionally, our research suggests the perceived "low level" of the VIX is not reason to be concerned. For example, we monitor the VIX with respect to the S&P 500 Index's (SPX) 20-day historical volatility, and refer to the percentage that the VIX is trading above the SPX's 20-day historical volatility as the "VIX premium." When the VIX is trading below the SPX's 20-day historical volatility, we refer to this scenario as the "VIX discount."
During the past couple of years, when the VIX and SPX 20-day historical volatility converge, it has presented a buying opportunity, like the buy signal that occurred in early September. At the other extreme, when the VIX reading is double the SPX's 20-day historical volatility, the market has become vulnerable to correction. At present, and per the chart below, the "VIX premium" is not yet flashing a caution signal.
While we have a bullish bias, what do we see as immediate risks to the market? First, next week is the first week of a five-week option expiration cycle. Since 2006, the probability of these weeks producing a positive return is lower than that of the first week of a four-week expiration cycle and all other weeks.
Another risk is that potentially stiff overhead resistance on the SPX lies just overhead in the 1,200-1,230 area. The 1,205 level is the site of the longer-term, 80-month moving average, which contained the September 2001 low on a monthly closing basis and, when breached on a monthly closing basis in June 2002 and September 2008, signaled major trouble ahead. Moreover, this trendline acted as resistance for several months in 2004 and again in April of this year. Moreover, 1,230 is the site of a 61.8% Fibonacci retracement of the 2007 peak and March 2009 low.
With technical resistance looming overhead as earnings season gets into full swing, midterm elections just around the corner, lots of buzz surrounding another round of quantitative easing, the next several weeks could prove to be extremely pivotal.
If you enjoy Monday Morning Outlook...
...why not check out Opening View, our daily preview of market activity? Each morning, we analyze the prior day, review the overnight markets, and monitor the morning wires to give you our special Schaeffer's take on the action, before the opening bell. Sign up here to have Opening View delivered straight to your inbox every morning.
Prepare for the investing week ahead. Every week, Bernie Schaeffer and his staff provide you with their insight about what has happened and, more importantly, what will happen in the market. We dig deep and show you what's happening behind the scenes, and tell you which indicators are predicting major market moves. If you enjoyed this week's edition of Monday Morning Outlook, sign up here for free weekly delivery straight to your inbox.
Indicator of the Week: Mutual Fund Flows
By Rocky White, Senior Quantitative Analyst
Foreword: Despite the strong rally over the last several weeks, mutual fund investors do not seem to believe in the rally. The Investment Company Institute (ICI) says money has been flowing out of U.S. domestic equity funds for 23 weeks in a row. This is evidence that the retail investor is very skeptical of this market. The 2008 crash and then the "flash crash" in May have caused a lot of uneasiness. That's why money is flowing out of equity funds and into bonds, which are perceived to be safer.
12-Month Fund Flows: Below is a long-term chart of the S&P 500 Index (SPX) along with the amount of money flowing into equity mutual funds (green line) and bond mutual funds (red line). Money naturally poured out of equity funds in 2008 when the market crashed. Twelve-month flows turned positive early this year, but turned negative again after September made five straight months of outflows.
Where's the money going? Clearly, much of that is heading into bond funds. More money is flowing into bond funds now than flowed into equity funds at the peak of the dot com bubble. Is that worrying for bond holders?
12-month equity flows versus 12-month bond flows and the SPX
Monthly Fund Flows: Below is another chart that helps illustrate what's going on. It shows the monthly inflows and outflows of equity and bond funds. Since 2009, we've seen 11 months of equity outflows and 10 months of inflows. The SPX, up about 75% since the March 2009 low, has been very strong during this period. Despite this market strength, mutual fund investors do not want any part of this market.
This indicates a huge amount of sideline money with the potential to propel this market higher. When this money does finally find its way into equities it can happen very quickly. Don't be left behind or you'll be missing out on some huge gains.
12-month equity flows versus 12-month bond flows and the SPX
This Week's Key Events: Full Speed Ahead for Earnings Season
Schaeffer's Editorial Staff
Here is a brief list of some of the key events this week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.
Monday
* The Federal Reserve will report industrial production numbers for September, while the National Association of Home Builders will issue its October Housing Market Index, a measure of builder confidence. Citigroup Inc. (C), Halliburton Co. (HAL), Hasbro Inc. (HAS), McMoRan Exploration Co. (MMR), Apple Inc. (AAPL), IBM Corp. (IBM), VMware Inc. (VMW), and Zions Bancorporation (ZION) will report earnings.
Tuesday
* The Commerce Department will release housing starts and building permits data for September. American Electric Power Co. Inc. (AEP), Bank of America Corp. (BAC), The Bank of New York Mellon Corp. (BK), The Coca-Cola Company (KO), EMC Corp. (EMC), Goldman Sachs Group Inc. (GS), Harley-Davidson Inc. (HOG), Illinois Tool Works Inc. (ITW), Johnson & Johnson (JNJ), Lockheed Martin Corp. (LMT), The New York Times Co. (NYT), Occidental Petroleum Corp. (OXY), Parker-Hannifin Corp. (PH), Peabody Energy Corp. (BTU), State Street Corp. (STT), Supervalu Inc. (SVU), UnitedHealth Group Inc. (UNH), Weatherford International Ltd. (WFT), Altera Corp. (ALTR), Boston Scientific Corp. (BSX), Intuitive Surgical Inc. (ISRG), Juniper Networks Inc. (JNPR), SLM Corp. (SLM), Tupperware Brands Corp. (TUP), Western Digital Corp. (WDC), and Yahoo! Inc. (YHOO) are scheduled to issue their quarterly reports.
Wednesday
* We'll get the usual weekly report on U.S. petroleum supplies, along with the Fed's Beige Book for October. Scheduled to report earnings are Abbott Laboratories (ABT), BlackRock Inc. (BLK), The Boeing Co. ( BA), Comerica Inc. (CMA) Delta Air Lines Inc. (DAL), Eaton Corp. (ETN), Genzyme Corp. (GENZ), Manpower Inc. (MAN), Media General Inc. (MEG), Stanley Black & Decker Inc. (SWK), US Airways Group Inc. (LCC), U.S. Bancorp (USB), Wells Fargo & Co. (WFC), E*Trade Financial Corp. (ETFC), eBay Inc. (EBAY), Netflix Inc. (NFLX), Seagate Technology plc (STX), and Xilinx Inc. (XLNX).
Thursday
* The Labor Department will release the weekly new jobless claims figures. Meanwhile, the Conference Board will report on September leading indicators, and the Philadelphia Fed will provide a look at manufacturing in its region in October. In the earnings spotlight will be Alaska Air Group Inc. (ALK), AT&T Inc. (T), BB&T Corp. (BBT), Caterpillar Inc. (CAT), Freeport-McMoran Copper & Gold Inc. (FCX), Cirrus Logic Inc. (CRUS), Danaher Corp. (DHR), Eli Lilly & Co. (LLY), Entergy Corp. (ETR), Fifth Third Bancorp (FITB), Goodrich Corp. (GR), The Hershey Co. (HSY), Huntington Bancshares Inc. (HBAN), ITT Educational Services Inc. (ESI), JetBlue Airways Corp. (JBLU), Patriot Coal Corp. (PCX), Philip Morris International Inc. (PM), PNC Financial Services (PNC), PPG Industries Inc. (PPG), Southwest Airlines Co. (LUV), SunTrust Banks Inc. (STI), The Travelers Companies Inc. (TRV), Union Pacific Corp. (UNP) United Parcel Service Inc. (UPS), W.R. Grace & Co. (GRA) Xerox Corp. (XRX), Amazon.com Inc. (AMZN), American Express Co. (AXP), Capital One Financial Corp. (COF), The Cheesecake Factory Inc. (CAKE), Chipotle Mexican Grill Inc. (CMG), The Chubb Corp. (CB), Citrix Systems Inc. (CTXS), NCR Corp. (NCR), and SanDisk Corp. (SNDK).
Friday
* There are no major economic reports scheduled for Friday. Honeywell International Inc. (HON), KeyCorp (KEY), Schlumberger Limited (SLB), and Verizon Communications Inc. (VZ) will report earnings.
Investors may be waiting on midterm elections, Fed action
by Todd Salamone 10/16/2010 11:21 AM
http://www.schaeffersresearch.com/commentary/observations.aspx?ID=102925
The Dow Jones Industrial Average inched ahead this past week, thanks to a modest rally on Wednesday, and maintained its perch north of 11,000. Looking ahead, Todd Salamone, Senior Vice President of Research, sees evidence that hedge funds are moving back into the market, which he interprets as bullish, but also warns of potentially stiff technical resistance just above current levels. Next, Senior Quantitative Analyst Rocky White examines the money flowing into (and out of) equity mutual funds and bond funds. Not to keep you in suspense, but investors are fleeing equities and parking their money in bonds. Rocky concludes that this adds up to "a huge amount of sideline money with the potential to propel this market higher." Finally, we wrap up with a look at some key economic and earnings reports slated for release this week.
Recap of the Previous Week: 'A Case for Further Action'
Schaeffer's Editorial Staff
The fall rally slowed to a walk this week. Earnings reports were cheery enough, but with the midterm elections just over two weeks away, investors may have checked into wait-and-see mode. They're also waiting on the Federal Reserve to disclose exactly what it plans to do to reboot the economy. Chairman Ben Bernanke clearly signaled that intent in a major speech on Friday, when he said "there would appear ... to be a case for further action," but he didn't spell out any details. Fed action is expected after the election.
The beginning of the week was nearly comatose. The Dow gained a barely measurable 0.03% on Monday, and another 0.09% Tuesday, for a combined advance of 14 points. The minutes from the latest meeting of the Federal Open Market Committee (FOMC), released Tuesday afternoon, were the only apparent news driver. Those minutes disclosed that the Fed is considering another round of quantitative easing, which was not exactly stop-the-presses news. More sobering: Fed staff trimmed their growth targets for 2010 and 2011.
Wednesday's session was far more lively, as earnings season heated up and the Street was cheered by upbeat results in three key sectors. Banking giant JPMorgan Chase & Co. (JPM), railroad company CSX Corp., (CSX) and the chip maker Intel Corp. (INTC) all wowed investors with better-than-expected results. The Dow spent much of the day in triple-digit gain territory above 11,100, but eventually settled for a very satisfactory 76-point win, or 0.69%, and finished at 11,096.
The high spirits were quickly dashed by a round of disappointing economic data Thursday, including an unexpected rise in jobless claims, and renewed pressure on the banking sector. The foreclosure crisis, which had been festering for months, came to a head this week after 50 state attorneys general announced they were investigating the practices of the mortgage servicing industry. Banking stocks tumbled. Although the bulls spent much of the day in retreat, the Dow pared most of its losses late in the afternoon. When the smoke cleared, the Dow had dropped an imperceptible 0.01%.
Gloom continued to hang over the banking sector on Friday. That mood was echoed by a small decline in the University of Michigan consumer sentiment survey, and a disappointing revenue report for General Electric Co. (GE). The gloom clearly outweighed the good news: Google (GOOG) reported smashing earning, lifting techs; retail sales were strong; and the Fed's Bernanke confirmed that the central bank is studying another round of quantitative easing. The Dow shed 0.29% for the session, but the Nasdaq Composite (COMP) climbed a healthy 1.37%. For the week, the Dow managed a 0.5% gain, the S&P 500 Index added 0.9%, and the COMP took the week's honors by advancing 2.8%.
What the Trading Desk Is Expecting: Are Hedge Funds Coming Back?
By Todd Salamone, Senior Vice President of Research
"One notable difference that we are seeing now relative to the two prior ventures into the 1,120-1,130 area (on the SPX) since June is indications that hedge funds are seeing value around current levels. This was not even close to being evident in June and early August, according to our option activity analysis... This would suggest to us a higher-probability chance of a breakout, as investors with an investment time frame beyond a day or week counter the actions of day traders and high-frequency traders playing the short-term, mean-reversion game."
--Monday Morning Outlook, Sept. 18, 2010
"...we continue to see evidence of hedge fund accumulation via our analysis of buy-to- open put volume on two of the three broader exchange-traded funds that we track. In addition, expiration of traditional options is only two weeks away. In the absence of an event that triggers a sell-off in equities, we could see another short-covering rally related to out-of-the-money put options expiring in the next 10 trading days."
-- Monday Morning Outlook, Oct. 2, 2010
"Hedge Fund Investors Turn Bullish on Stock Market"
--Reuters headline, Oct. 13, 2010
Regular readers of Monday Morning Outlook may not be surprised by the Reuters headline. In our analysis of buy-to-open option activity on major exchange-traded funds (ETFs), the increasing put volume relative to call volume amid market strength was, and continues to be, a strong indication that hedge funds are in accumulation mode. With retail mutual fund investors largely disengaged from the stock market, it is likely that hedge fund managers are dictating the market's direction.
Therefore, the buy-to-open put/call volume ratio on ETFs such as the SPDR S&P 500 ETF Trust (SPY), iShares Russell 2000 Index Fund (IWM), and PowerShares QQQ Trust (QQQQ), continues to be one of our main focuses as we move through earnings season and into other market-moving events in early November, such as the midterm elections and the Federal Open Market Committee meeting.
Of particular interest is that hedge fund managers could be in the early stages of equity accumulation, after an absence that lasted from May through much of August. Per the chart below, note how low the 20-day buy-to-open put/call volume ratio was prior to turning higher at the beginning of September. Our theory is that the lower this ratio, the less exposed hedge funds are to equities (and vice versa when the ratio is high). So, even though we are seeing evidence that hedge funds are becoming more bullish, the ratio is not at levels that would suggest they are "over-the-top" bullish, suggesting there is a healthy degree of buying power from this group at present.
Daily SPX chart since January 2009 with 20-day BTO put/call ratio for the SPX, QQQQ, and IWM
Some professional traders continue to express caution as it relates to the current level of the CBOE Market Volatility Index (VIX) and the term structure of VIX futures. This concern – which has been apparent in the market for weeks - suggests that there is still the potential for short covering, the unwinding of hedges, or sideline money that can drive stocks higher.
Additionally, our research suggests the perceived "low level" of the VIX is not reason to be concerned. For example, we monitor the VIX with respect to the S&P 500 Index's (SPX) 20-day historical volatility, and refer to the percentage that the VIX is trading above the SPX's 20-day historical volatility as the "VIX premium." When the VIX is trading below the SPX's 20-day historical volatility, we refer to this scenario as the "VIX discount."
During the past couple of years, when the VIX and SPX 20-day historical volatility converge, it has presented a buying opportunity, like the buy signal that occurred in early September. At the other extreme, when the VIX reading is double the SPX's 20-day historical volatility, the market has become vulnerable to correction. At present, and per the chart below, the "VIX premium" is not yet flashing a caution signal.
While we have a bullish bias, what do we see as immediate risks to the market? First, next week is the first week of a five-week option expiration cycle. Since 2006, the probability of these weeks producing a positive return is lower than that of the first week of a four-week expiration cycle and all other weeks.
Another risk is that potentially stiff overhead resistance on the SPX lies just overhead in the 1,200-1,230 area. The 1,205 level is the site of the longer-term, 80-month moving average, which contained the September 2001 low on a monthly closing basis and, when breached on a monthly closing basis in June 2002 and September 2008, signaled major trouble ahead. Moreover, this trendline acted as resistance for several months in 2004 and again in April of this year. Moreover, 1,230 is the site of a 61.8% Fibonacci retracement of the 2007 peak and March 2009 low.
With technical resistance looming overhead as earnings season gets into full swing, midterm elections just around the corner, lots of buzz surrounding another round of quantitative easing, the next several weeks could prove to be extremely pivotal.
If you enjoy Monday Morning Outlook...
...why not check out Opening View, our daily preview of market activity? Each morning, we analyze the prior day, review the overnight markets, and monitor the morning wires to give you our special Schaeffer's take on the action, before the opening bell. Sign up here to have Opening View delivered straight to your inbox every morning.
Prepare for the investing week ahead. Every week, Bernie Schaeffer and his staff provide you with their insight about what has happened and, more importantly, what will happen in the market. We dig deep and show you what's happening behind the scenes, and tell you which indicators are predicting major market moves. If you enjoyed this week's edition of Monday Morning Outlook, sign up here for free weekly delivery straight to your inbox.
Indicator of the Week: Mutual Fund Flows
By Rocky White, Senior Quantitative Analyst
Foreword: Despite the strong rally over the last several weeks, mutual fund investors do not seem to believe in the rally. The Investment Company Institute (ICI) says money has been flowing out of U.S. domestic equity funds for 23 weeks in a row. This is evidence that the retail investor is very skeptical of this market. The 2008 crash and then the "flash crash" in May have caused a lot of uneasiness. That's why money is flowing out of equity funds and into bonds, which are perceived to be safer.
12-Month Fund Flows: Below is a long-term chart of the S&P 500 Index (SPX) along with the amount of money flowing into equity mutual funds (green line) and bond mutual funds (red line). Money naturally poured out of equity funds in 2008 when the market crashed. Twelve-month flows turned positive early this year, but turned negative again after September made five straight months of outflows.
Where's the money going? Clearly, much of that is heading into bond funds. More money is flowing into bond funds now than flowed into equity funds at the peak of the dot com bubble. Is that worrying for bond holders?
12-month equity flows versus 12-month bond flows and the SPX
Monthly Fund Flows: Below is another chart that helps illustrate what's going on. It shows the monthly inflows and outflows of equity and bond funds. Since 2009, we've seen 11 months of equity outflows and 10 months of inflows. The SPX, up about 75% since the March 2009 low, has been very strong during this period. Despite this market strength, mutual fund investors do not want any part of this market.
This indicates a huge amount of sideline money with the potential to propel this market higher. When this money does finally find its way into equities it can happen very quickly. Don't be left behind or you'll be missing out on some huge gains.
12-month equity flows versus 12-month bond flows and the SPX
This Week's Key Events: Full Speed Ahead for Earnings Season
Schaeffer's Editorial Staff
Here is a brief list of some of the key events this week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.
Monday
* The Federal Reserve will report industrial production numbers for September, while the National Association of Home Builders will issue its October Housing Market Index, a measure of builder confidence. Citigroup Inc. (C), Halliburton Co. (HAL), Hasbro Inc. (HAS), McMoRan Exploration Co. (MMR), Apple Inc. (AAPL), IBM Corp. (IBM), VMware Inc. (VMW), and Zions Bancorporation (ZION) will report earnings.
Tuesday
* The Commerce Department will release housing starts and building permits data for September. American Electric Power Co. Inc. (AEP), Bank of America Corp. (BAC), The Bank of New York Mellon Corp. (BK), The Coca-Cola Company (KO), EMC Corp. (EMC), Goldman Sachs Group Inc. (GS), Harley-Davidson Inc. (HOG), Illinois Tool Works Inc. (ITW), Johnson & Johnson (JNJ), Lockheed Martin Corp. (LMT), The New York Times Co. (NYT), Occidental Petroleum Corp. (OXY), Parker-Hannifin Corp. (PH), Peabody Energy Corp. (BTU), State Street Corp. (STT), Supervalu Inc. (SVU), UnitedHealth Group Inc. (UNH), Weatherford International Ltd. (WFT), Altera Corp. (ALTR), Boston Scientific Corp. (BSX), Intuitive Surgical Inc. (ISRG), Juniper Networks Inc. (JNPR), SLM Corp. (SLM), Tupperware Brands Corp. (TUP), Western Digital Corp. (WDC), and Yahoo! Inc. (YHOO) are scheduled to issue their quarterly reports.
Wednesday
* We'll get the usual weekly report on U.S. petroleum supplies, along with the Fed's Beige Book for October. Scheduled to report earnings are Abbott Laboratories (ABT), BlackRock Inc. (BLK), The Boeing Co. ( BA), Comerica Inc. (CMA) Delta Air Lines Inc. (DAL), Eaton Corp. (ETN), Genzyme Corp. (GENZ), Manpower Inc. (MAN), Media General Inc. (MEG), Stanley Black & Decker Inc. (SWK), US Airways Group Inc. (LCC), U.S. Bancorp (USB), Wells Fargo & Co. (WFC), E*Trade Financial Corp. (ETFC), eBay Inc. (EBAY), Netflix Inc. (NFLX), Seagate Technology plc (STX), and Xilinx Inc. (XLNX).
Thursday
* The Labor Department will release the weekly new jobless claims figures. Meanwhile, the Conference Board will report on September leading indicators, and the Philadelphia Fed will provide a look at manufacturing in its region in October. In the earnings spotlight will be Alaska Air Group Inc. (ALK), AT&T Inc. (T), BB&T Corp. (BBT), Caterpillar Inc. (CAT), Freeport-McMoran Copper & Gold Inc. (FCX), Cirrus Logic Inc. (CRUS), Danaher Corp. (DHR), Eli Lilly & Co. (LLY), Entergy Corp. (ETR), Fifth Third Bancorp (FITB), Goodrich Corp. (GR), The Hershey Co. (HSY), Huntington Bancshares Inc. (HBAN), ITT Educational Services Inc. (ESI), JetBlue Airways Corp. (JBLU), Patriot Coal Corp. (PCX), Philip Morris International Inc. (PM), PNC Financial Services (PNC), PPG Industries Inc. (PPG), Southwest Airlines Co. (LUV), SunTrust Banks Inc. (STI), The Travelers Companies Inc. (TRV), Union Pacific Corp. (UNP) United Parcel Service Inc. (UPS), W.R. Grace & Co. (GRA) Xerox Corp. (XRX), Amazon.com Inc. (AMZN), American Express Co. (AXP), Capital One Financial Corp. (COF), The Cheesecake Factory Inc. (CAKE), Chipotle Mexican Grill Inc. (CMG), The Chubb Corp. (CB), Citrix Systems Inc. (CTXS), NCR Corp. (NCR), and SanDisk Corp. (SNDK).
Friday
* There are no major economic reports scheduled for Friday. Honeywell International Inc. (HON), KeyCorp (KEY), Schlumberger Limited (SLB), and Verizon Communications Inc. (VZ) will report earnings.
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