Flat open for major market indices as traders continue to digest a plethora of earnings announcements. On Wednesday, stocks sold off in the afternoon session, leaving the Dow (^DJI) below the 10K level. Gains have been so strong since the March lows that even very strong earnings news has not provided the gains one would expect. Data on jobless claims was disappointing this morning and this has also kept the bulls at bay.

EBay (EBAY) announced earnings last night that exceeded expectations, but traders are selling the stock because of a disappointing outlook. The online retailer saw earnings fall 29 percent, but revenues did rise 6 percent. The company's guidance for the fourth quarter was at the low end of estimates and this is a concern since it covers the holiday shopping season. Analysts have supported the company, stating that eBay often provides conservative guidance. EBAY shares are down nearly 5 percent at a price below $24. Nonetheless, the stock is well off its 52-week low of $9.91.

Dow component AT&T (T) reported earnings of 54-cents a share, 4-cents above expectations. Revenues did fall 1.3 percent, but was slightly above estimates. T stated that it added 2.0 million wireless customers in the quarter, its best net gain ever for the third quarter. AT&T has benefited from its relationship with Apple (AAPL) as the only provider for the iPhone. T shares have struggled in 2009, down nearly 10 percent, but the stock is up more than 2 percent in early trading at a price of $26.60.

McDonald's (MCD) shares are also higher this morning after reporting better than expected earnings. The fast food giant made $1.15 a share, 4-cents better than expected. Revenues were down 3.5 percent overall, but actually up 2 percent when the effects of currency exchange are excluded. MCD shares are trading near $59.75, a gain of 2.5 percent. The stock has a 52-week range from $50.44 to $64.46.

In economic news, weekly jobless claims unexpected rose to 531,000 when a figure of 519,000 was anticipated. However, the four-week moving average does continue to move lower, down for the seventh week in a row to 532,250. Continuing claims for the prior week also fell, down nearly 100,000.

About 50 S&P 500 (^SPX) components will report today, so traders will have plenty of data to digest. Overall, stocks are higher in early trading, but the bulls seem to have gotten a bit more cautious. The CBOE Market Volatility Index (^VIX) hit a 52-week low just above 20 yesterday, which has raised some concerns about complacency. However, the fear index has come off these lows, currently trading above 22.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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