Options Trading News

February 14, 2013  Thu 7:17 AM CT

Stocks are heading lower this morning after European economic reports came in weaker than expected.

S&P 500 futures are down by about 0.25 percent, compared with losses of about 1 percent in Paris and Frankfurt, while Spain is down almost 2 percent Atlantic. Asian shares inched higher overnight, though China and Taiwan remain closed for the Lunar New Year.

Reports from Germany, France, Italy, and the broader Eurozone showed gross domestic products contracting more than expected in the fourth quarter. That is pouring cold water on a region that has led global markets higher since the autumn.

The news comes with the S&P 500 sitting at a level where it peaked in December 2007 before crashing the following year. Yields on 10- and 30-year Treasuries have also returned to areas where they peaked in the previous year, which could make some traders expect a pause or reversal.

The only other big data point today is initial jobless claims at 8:30 a.m. ET. Economists expect a reading of 365,000 versus 366,000 a week earlier.

Foreign-exchange markets are showing a pattern of risk aversion, while commodities are more neutral. The euro and Australian dollar fell, while the Japanese yen is mostly higher. Oil and copper, which tend to follow economic sentiment, are little-changed, and agricultural foodstuffs are mixed. Precious metals are inching higher. (See our story about a large bullish trade in gold yesterday.)

Many companies are moving based on their own news. H.J. Heinz is up about 20 percent after agreeing to be purchased by Warren Buffett's Berkshire Hathaway. Weight Watchers is down about 15 percent after management issued weak guidance. Cisco Systems and General Motors are also marginally lower after reporting quarterly results, while PepsiCo and Applied Materials are slightly higher.
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