Quadruple Witch and Rising S&P
Today is a quadruple witching expiration (quarterly expiration of stock and index options, and stock and index futures). Volume has been abnormally low. Average volume on the NYSE consolidated tape has been about 5 billion shares this year, but we have not had a day that exceeds 4 billion shares since Sept. 1. Even options trading has been on the light side.
Still, a close over 1127 on the S&P 500 would be the highest close since mid-May.
Stocks and the euro weakened late morning in Europe on concerns that the Irish government may force a haircut on bond holders of Allied Irish bank. The government has been moving toward a blanket guarantee of the bank debt but there is obviously some discussion that bond holders should bear some of the pain. (More on Irish turmoil: Irish Bond Yield Spread Hits New Peak)
There's still a macro vs micro pull going on: yesterday we had disappointing Philly Fed (2 months of contraction) vs. good news from Oracle and RIM , and Apple ripping to new highs.
1) Unlike a few of its competitors earlier this week, steelmaker ArcelorMittal reaffirmed its Q3 EBITDA guidance of $2.1 billion-$2.5 billion.
2) Illinois Tool Works reported a 12 percent increase in organic revenues over the last 3 months. The industrial equipment maker saw particular strength in its power systems/electronics (up 25 percent), transportation (up 22 percent), and industrial packaging (up 16 percent) sales.
Q3 earnings guidance of $0.72-$0.84 stays inline with expectations of $0.81.
3) Texas Instruments rises 3 percent after it announcing a new buyback program and raising its dividend. The chipmaker is the latest tech firm to put its cash to use by hiking its dividend by 8 percent to $0.13 and authorizing a $7.5 billion stock buyback.
4) Massey Energy falls 4 percent after the coal miner announced 2010 results would be at the low end of its previously-issued range. Expected coal shipments and coal prices are now seen at the low end of its earlier forecasts due to one idle mine and stricter safety enforcement by federal regulators. CEO Dan Blankenship notes the firms operations "have continued to struggle since April," and now expects an operating loss in the third quarter.
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