The Dow Jones Industrial Average (DJIA) has pulled back roughly
4.7% since peaking near 10,720 in mid-August. While the DJIA closed
out last week with a 60-point drop on Friday, the blue-chip
barometer closed off its session lows, and comes into this week
trading above potential support near 10,200. Meanwhile, the S&P
500 Index (SPX) held at the 1,070 level on Friday, though the
broad-market index is once again staring up at potentially stiff
resistance in the 1,100 region. Heading into the open, futures on
the DJIA and SPX are trading about 38 points and 5.5 points above
fair value, respectively, pointing toward a positive start to the
session. Finally, the CBOE Market Volatility Index (VIX) remains
somewhat in check, with the index closing above its 10-week
trendline for a second week in a row, but unable to surmount its
20-week moving average in the 27 area. If the VIX were to move
lower from this point, it could be bullish for the market. That
said, we are entering a post-expiration week, which could be
fraught with headwinds as investors work to re-establish hedges
that expired last week.
Wheeling and dealing is dominating the equities landscape this
Monday morning. First up, Potash Corp. of Saskatchewan (
) once again urged shareholders to reject BHP Billiton Plc.'s (
) $40 billion unsolicited bid. Potash said that it's been contacted
by and has reached out to a "number of third parties who have
expressed an interest in considering alternative transactions."
Meanwhile, Hewlett-Packard Co. (
) has outbid Dell Inc. (
) for 3PAR Inc. (
), offering $24 per share for PAR, a 33.3% premium to Dell's offer
of $18 per share. H-P hopes the deal will close by the year's
Finally, HSBC Holdings plc (
) has entered into exclusive talks to acquire a majority stake in
Nedbank Group Ltd. from U.K. insurer Old Mutual plc. HSBC stated
that talks are in progress and that any deal would be subject to
conditions including regulatory clearances.
The Financial Times
reported Sunday that HSBC was set to win the bidding for a 52%
holding in Nedbank, South Africa's fourth-largest lender.
On the earnings front, Focus Media Holding Limited (
) is scheduled to release its quarterly earnings report today. Keep
your browser at
for more news as it breaks.
There are no major economic reports scheduled for release today.
Tomorrow offers up July's existing home sales data. On Wednesday,
July's durable goods orders, new home sales, and the weekly report
on U.S. petroleum supplies will hit the Street. Weekly initial
jobless claims will arrive on Thursday, while Friday rounds out the
week with a second look at second-quarter U.S. gross domestic
product and the final reading on the University of Michigan's
August consumer sentiment index.
Equity option activity on the Chicago Board Options Exchange (
) saw 1,331,720 call contracts traded on Friday, compared to
967,871 put contracts. The resultant single-session put/call ratio
arrived at 0.73, while the 21-day moving average rose to 0.64.
**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
Live From San Francisco: Senior Equities Analyst Andrea
Kramer live blogged from the Schaeffer's booth at the San
Francisco Money Show this week. If you didn't' catch it, you
missed out on Steve Forbes and his three-step approach for
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to check it out.
Overseas trading is mixed, as six of the 10 foreign indexes that
we track are in positive territory. The cumulative average return
on the collective stands at a gain of 0.19%. Asian markets closed
broadly lower, with Japan once again leading the decline as
concerns grew that authorities may not step in and prevent a
continued rise in the yen. Elsewhere, mining stocks were standouts,
as shares gained after Australia's weekend election failed to
produce a clear winner. Deal making is helping to lift sentiment in
the euro zone, sending European markets higher. Specifically, Old
Mutual rose nearly 5% after HSBC Holdings said it's in talks to
acquire a majority stake in Old Mutual's Nedbank Group.
Currencies and Commodities
With the euro struggling to move higher, the U.S. Dollar Index
is once again flirting with resistance near its 10-week moving
average. The greenback has pulled back a bit in early European
trading, with the index down 0.11% at $82.97. Commodities have
garnered some strength from this pullback in the dollar, with the
front-month crude contract up 28 cents at $74.10 per barrel.
Finally, gold is trading essentially flat, rising 50 cents to trade
at $1,229.30 an ounce in London.
Unusual Put and Call Activity:
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