Thursday’s Vital Data: Apple Inc. (AAPL), Kroger Co (KR) and AT&T Inc. (T)

U.S. stock futures are indicating a lower open this morning, as Wall Street braces for earnings from a pair of banking giants. JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc (NYSE:C) are both slated to report earnings ahead of the open later this morning. Also arriving ahead of the open are economic reports on jobless claims and the latest Producer Price Index (PPI) data.

Thursday’s Vital Data: Apple Inc. (AAPL), Kroger Co (KR) and AT&T Inc. (T)Against this backdrop, futures on the Dow Jones Industrial Average have fallen 0.10%, S&P 500 futures are down 0.17% and Nasdaq-100 futures have dropped 0.05%.

In the options pits, volume was average as about 12.8 million calls and 10.8 million puts crossed the tape. On the CBOE, the single-session equity put/call volume ratio rose to 0.62, while the 10-day moving average held pat at 0.62.

Taking a closer look at Wednesday’s volume, Apple Inc. (NASDAQ:AAPL) failed to best technical resistance following Mac sales news. Elsewhere, Kroger Co (NYSE:KR) drew heavy put volume despite signaling interest in selling its convenience stores. Finally, AT&T Inc. (NYSE:T) shares dipped amid heavy put volume after warning that third-quarter earnings and revenue would be lower than expected due to hurricanes and earthquakes.

Thursday’s Vital Options Data: Apple Inc (AAPL), Kroger Co (KR) and AT&T Inc. (T)

Apple Inc (AAPL)

As my colleague Brad Moon quipped yesterday, the decline in PC sales is pretty much the norm right now. However, the decline in Mac sales is a different story. Apple Mac sales used to fly in the face of quarterly declines in PC sales … but no more. According to Gartner, Mac sales fell once again last quarter, pushing Apple to fifth place among global PC vendors. What’s more, domestic sales used to be a bastion of support for Apple, but Mac sales stateside slide 7.6% year-over-year.

The news helped cap AAPL stock yesterday, with the shares stalling at overhead resistance from their 50-day moving average.

Both data points fell on deaf ears in AAPL options pits, however. Volume swelled to 262,000 contracts — about half Apple’s daily average — with calls making up 64% of the day’s take. Furthermore, short-term traders are quite bullish on AAPL.

Currently, the October put/call open interest ratio rests at a lowly 0.64, with calls nearly doubling puts among front-month options. Peak call OI for Apple now resides at the $160 strike, totaling more than 90,000 contracts.

Kroger Co (KR), Inc.’s (NASDAQ:AMZN) buyout of WholeFood Market was a serious blow to Kroger, but the U.S.’s No. 1 grocer isn’t giving up without a fight. The company has embarked on a plan to revamp its brick-and-mortar supermarkets, lower prices and boost in-store and online technology. Furthermore, Kroger also announced that it is exploring the sale of its 784 KwikShop, Tom Thumb, QuickStop and other convenience stores.

KR stockholders liked the idea, with Kroger stock rising more than 1% following the news. KR options traders, however, piled into puts. Volume rose to nearly six times KR’s daily average at 181,000 contracts. Puts made up 76% of Wednesday’s take.

KR was already home to elevated short-term put OI, with the October put/call OI ratio resting at 1.15. But, if Wednesday’s activity continues to gain momentum, it could send this ratio soaring higher as speculators lose faith in KR’s ability to bounce back.

AT&T Inc. (T)

AT&T warned that third-quarter earnings and revenue would come in below expectations and that the fourth quarter could also be affected. The reason: hurricanes and earthquakes that ripped into the U.S. and Mexico. In addition, T also noted that it lost about 90,000 U.S. video subscribers in the quarter due to strong competition in pay TV markets.

T stock dipped less than 1% on the news, but options traders were nowhere near as optimistic. In fact, puts gobbled up 72% of the more than 133,000 contracts traded on Wednesday. Surprisingly despite T’s recent rally, October options traders have pushed the put/call OI ratio skyward to a near-term high of 2.01 — that’s two puts open in October for every one call.

With AT&T stock already retreating from overhead resistance at it’s 200-day moving average, these put traders may be onto something.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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