DJIA forecast: slowly down or up rapidly?

Economic Calendar can inflence on Dow Jones Industrial Average

In brief: The downgrade reflects our opinion of the challenges and uncertainties that BP continues to face in the aftermath of the explosion on the Deepwater Horizon rig in the Gulf of Mexico on April 20, 2010, and the subsea Macondo well blowout, - said Simon Redmond, an S&P credit analyst.

Dow Jones Industrial Average may fall against the background of the fall of China’s Shanghai Composite index – analysts believe. At the same time, there is hope for rapid growth thanks to positive U.S. statistics. Following a sharp rally into the close on Thursday, the Dow Jones Industrial Average (DJIA) closed its third consecutive day above 10,400. What’s more, the S&P 500 Index (SPX) logged its third close in a row above its 200-day moving average, continuing to build the case that Wall Street is finally emerging from a bull market correction.

Trading today could be interesting, however; today is triple-witching Friday, as option expiration coincides with the expiration of stock index futures and stock index options. This triple expiration can create additional volatility for the market, though much of the repositioning doesn’t arrive until the Monday morning following expiration. Heading into the open, futures on the DJIA and SPX are trading in a tight range, down 12 points and 1 point versus fair value, respectively, so plan accordingly. In equity news, Standard & Poor’s Ratings Services cut BP plc’s (BP) long-term credit rating to A from AA-, keeping the company on a negative outlook. Also on the ratings front, Moody’s Investors Service upgraded the corporate and probability of default ratings for Tenet Healthcare Corp. (THC) to B2 from B3. Moody’s said that the company’s ratings outlook is stable. “The upgrade of Tenet’s ratings reflects continued improvement in operating results, which was further supported by the company’s recent announcement raising 2010 adjusted EBITDA guidance,” said Moody’s in a statement.

Earnings Preview

There are no earnings reports scheduled for release today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar is devoid of reports today. Looking ahead, Monday’s calendar is also clear, while May’s existing home sales will arrive on Tuesday. As for Wednesday, weekly U.S. petroleum supplies will be overshadowed later in the day by the Federal Open Market Committee’s interest rate decision. Thursday brings the usual weekly initial jobless claims, as well as May’s durable goods orders. Finally, we round out next week with the initial third-quarter gross domestic product reading and June’s final University of Michigan consumer sentiment index.

Ukrainian Globalist
2010-06-18 14:26, Economics.

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