Opening View: DJIA Bulls Hit Pause; Japan Puts Brakes on Yen

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The Dow Jones Industrial Average (DJIA) ended its winning streak at four in a row on Tuesday, closing a lackluster session with an 18-point loss. The blue chip barometer enters today trading above support at the 10,500 level, though the Dow may test this region early in today's trading, as futures on the DJIA are trading 15 points below fair value. The S&P 500 Index (SPX), meanwhile, finished its second consecutive session above its 200-day moving average, despite following the Dow lower on Tuesday. That said, SPX futures are indicating an opening loss of about 2.8 points, meaning that the index could test this region shortly after the open. Meanwhile, Wall Street will be closely watching for additional moves out of Japan, after the country finally intervened in the currency markets to halt the yen's meteoric rise versus the U.S. dollar. Ripple effects from Japanese intervention have sent commodities tied to the greenback sharply lower. As such, a stronger-than-expected rise in U.S. petroleum supplies at 10:30 a.m. Eastern could sink the already struggling sector.

In equity news, Beazer Homes USA Inc. ( BZH ) lowered its new home orders guidance for the year, citing a slower-than-expected improvement in orders. The company said it needs to book 767 orders in the final quarter to match the year-earlier total of 4,205. "Although housing affordability is at record levels, prospective home buyers continue to exercise caution in committing to a home purchase transaction," Beazer said. The company has originally said that fiscal 2010 orders would be above the previous year's level, despite the expiration of a home-buyer tax credit in April.

Elsewhere, MasterCard Inc. ( MA ) said that its board of directors approved a $1 billion Class A common share repurchase program. The authorization is effective immediately, the company said. "This stock repurchase program is the result of a periodic review of our capital structure, and is enabled by MasterCard's strong and consistent cash flow," Ajay Banga, chief executive of MasterCard, said in a statement.

Earnings Preview

On the earnings front, CLARCOR Inc. ( CLC ) and The Dress Barn Inc. ( DBRN ) are slated to release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The New York Fed will release its report on September manufacturing activity this morning, which will be accompanied by August's industrial production and the weekly report on U.S. petroleum supplies. We'll get the weekly report on new jobless claims tomorrow, as well as the producer price index for August and the Philadelphia Fed's manufacturing report. Finally, the Labor Department will deliver the August consumer price index on Friday, while the University of Michigan will give its first peek at consumer sentiment in September.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,290,557 call contracts traded on Tuesday, compared to 787,495 put contracts. The resultant single-session put/call ratio arrived at 0.61, while the 21-day moving average held at 0.62.

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, with Asian stocks rallying in the wake of Japanese intervention in the currency markets, while European shares are being dragged lower by falling commodities. At last check, only four of the 10 foreign indexes that we track were in positive territory, with a cumulative average return of 0.04%. Japanese exporters surged after the yen pulled back from 15-year highs versus the U.S. dollar. Finance Minister Yoshihiko Noda confirmed intervention in the foreign-exchange markets but didn't specify the amount of money involved. However, the falling yen provided lift for the U.S. dollar, and, consequently, drag for commodities. Already troubled by falling German business-sentiment data, European markets are following commodities-related stocks lower.

Overseas markets

Currencies and Commodities

Following the intervention of Japanese authorities, the U.S. dollar rebounded from 15-year lows versus the yen. The move helped lift the greenback to ¥85.07 from yesterday's low of ¥82.85. The U.S. Dollar Index was also pressured higher, rising 0.73% in pre-market trading to hover near 81.67. Commodities, however, fell following the dollar's rise. Gold futures have slipped $1.70 to $1,270 an ounce, down from Tuesday's record high. Finally, crude futures have been hit hard by the rally in the U.S. dollar, with the lead contract off $1.04 to $76.79 per barrel.

Currencies and commodities

Unusual Put and Call Activity:

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Unusual options activity - puts

Unusual options activity - calls

Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.



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This article appears in: Investing , Options

Referenced Stocks: BZH , CBOE , CLC , DBRN , MA

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