Early indications point to a steady open on Wall Street Friday, but without much news to guide the action one way or the other. Less than an hour before the opening bell on Wall Street, stock index futures indicate that both the Dow Jones Industrial Average and the NASDAQ will open the trading session with modest gains.
Disappointing news from Sony Ericsson (SNE) and Palm (PALM) might keep a lid on early morning rally attempts. LM Ericsson (ERIC) fell 8.1 percent after warning that its half-owned mobile phone business with Sony could lose as much as $533.2 million.
Similarly, handset maker Palm (PALM) fell 8 percent in overseas trading after reporting a $98 million loss after the close of trading Thursday.
No economic data are due out today, but Federal Reserve Chairman Ben Bernanke might grab some of the market's attention. The head of the Fed speaks about the financial crisis today.
Bonds are holding steady after big gains mid-week. The yield on the benchmark ten-year Treasury is unchanged this morning at 2.6 percent, down substantially from 3 percent Wednesday morning--before the Federal Reserve rattled the market by announcing plans to buy back up to $300 billion in long-term Treasury securities.
The dollar is stabilizing after selling off on the Fed Treasury buyback news. The buck is up .98 to 95.51 on the yen against. The euro is down .006 to 1.36 against the US currency.
Crude oil dipped $1.00 to $50.61 after rallying more than $3 yesterday. Similarly, gold gave back $8.8 to $950 after the big gains seen Thursday.
Volume surged in the options market Thursday as the Dow Jones Industrial Average fell 86 points and players squared positions ahead of the triple witch options expiration. Approximately 18.8 million calls and 8.8 million puts traded. The CBOE Volatility Index (.VIX) rallied 3.62 to 43.68.
Yahoo (YHOO) finished higher on reports Microsoft (MSFT) is still interested in doing a search deal with Yahoo. Microsoft's Ballmer and Yahoo's Bartz spoke on the phone, according to Reuters. Shares of Yahoo bucked the bearish market trend and gained 32 cents to $13.74 Thursday. Options volume rose to three times the average daily levels, with 104,000 calls and 13,000 puts traded. April 12 and 20 calls were among the day's most actives.
Bullish trading was also seen in Visa (V), Yamana Gold (AUY), the PHLX Bank Sector Index (.BKX), and the iShares Silver Trust (SLV).
Large straddle buyers surfaced in EMC (EMC) pushing up open interest in July 13 puts and calls buy more than 25,000 (50K) total.
Deutsche Bank (DB) finished the day up $1.47 to $38.71 and options volume rose to five times the usual levels. 12,000 puts and 4,800 calls traded on the day. It appears that put buyers were taking positions in the April 30s. 5,500 traded, compared to open interest of 3,928. Open interest increased by 4,757. In addition, 90 percent of the volume hit ask-side of the bid-ask spread, suggesting premium buyers were dominating the action and taking out positions in the out-of-the-money contract.
Bearish trading also surfaced in Morgan Stanley (MS), Autoliv (ALV), and J Crew (JCG).
Frederic Ruffy
WhatsTrading.com
