Opening View: Can the SPX Hold Above 1,100?

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The Dow Jones Industrial Average (DJIA) vaulted 3.2% last week, taking out short-term resistance in the 10,350-10,400 region, as well as besting its 200-day moving average. The S&P 500 Index (SPX), meanwhile, toppled psychological resistance at the 1,100 level, but is still staring up at its own 200-day trendline in the 1,115 region. Activity is sluggish in pre-market trading this morning, as Wall Street digests the results from the European banking system stress tests. Heading into the open, futures on the DJIA and the SPX are trading five points and one point above fair value, respectively. Look for the DJIA to struggle near 10,450, which is home to a 50% retracement of the Dow's July low and April high, while the SPX could meet with resistance near 1,105-1,110. Finally, the CBOE Market Volatility Index (VIX) has pulled back to its 200-day moving average near the 23.50 level. The VIX has not closed a session below this trendline since May 3.

In equity news, Gilead Sciences Inc. ( GILD ) announced that it will buy back at least $1 billion in common stock, and fund the purchase by issuing $2.2 billion in convertible senior notes. The company said that it will use the remainder of the senior-note issue for general corporate purposes. The repurchases will be privately negotiated and off-market transactions from buyers of the notes.

In merger and acquisition news, Delta Petroleum Corp. ( DPTR ) agreed to sell various non-core assets to Wapiti Oil & Gas for $130 million. The assets include Delta's 31% working interest in the Garden Gulch field of the Piceance Basin in Colorado, as well as assets in Texas, and the firm's stake in Piper Petroleum. The proceeds from the sale will be used to reduce debt.

Finally, Enterprise Products Partners ( EPD ) posted a second-quarter net profit of $357.2 million, or 46 cents per unit, as revenue rose 39% to $7.54 billion. The company said that its midstream systems were operating at or near record levels, with natural gas pipeline volumes at a record 12.7 trillion British thermal units per day. Analysts were expecting earnings of 44 cents per share on sales of $7.56 billion.

Earnings Preview

On the earnings front Sohu.com Inc. ( SOHU ), Lorillard Inc. ( LO ), SL Green Realty Corp. ( SLG ), Albemarle Corp. ( ALB ), and Universal Health Services Inc. ( UHS ) are scheduled to release their quarterly earnings report today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

On the economic front, new home sales for June will arrive later this morning. Tomorrow, we'll get the Case-Shiller home price index for May and the Conference Board's Consumer confidence Index for July. On Wednesday, the market will be graced with the weekly report on U.S. petroleum supplies, while Thursday offers up weekly initial jobless claims and the Fed's Beige Book. On Friday, we'll get the latest numbers on second-quarter gross domestic product, along with the Chicago Purchasing Managers' Index for July, and a final look at July consumer confidence as measured by Reuters and the University of Michigan.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,123,923 call contracts traded on Friday, compared to 646,922 put contracts. The resultant single-session put/call ratio arrived at 0.58, while the 21-day moving average slipped to 0.63.

Volatility indices

NYSE and Nasdaq summary

**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**

Dow, S&P and Nasdaq futures

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Overseas Trading

Overseas trading is mixed this morning, as only four of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.08%. In Asia, regional indexes moved higher, as the uncertainty surrounding the European banking stress tests was finally lifted, though modest doubts about certain lenders remained. Speaking of Europe, regional indexes are mostly lower following news that seven out of the 91 banks receiving stress testing failed.

Overseas markets

Currencies and Commodities

Crude futures are headed lower this morning, despite a relatively flat session in Asian trading. The front-month contract was last seen lower by 0.85% at $78.31 per barrel. Elsewhere, gold futures remain bound to a tight range this morning, with the front-month contract down $1.40 at $1,186.40 an ounce. Finally, the U.S. dollar is little changed this morning versus its major foreign rivals. Specifically, the U.S. Dollar Index was last seen lower by 0.04% at $82.43.

Currencies and commodities

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

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