Opening View: DJIA Faces Tough Resistance Ahead of Beige Book

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All eyes are on the Fed and Chairman Ben Bernanke today. Bernanke will testify before the House Budget Committee this morning, while the Fed will release its Beige Book, a snapshot of the economy, this afternoon. Bernanke on Monday delivered a relatively upbeat assessment of the economy, telling ABC he doesn't expect a double-dip recession. "So far the news is pretty good," said the Fed chief. "My best guess is that we'll have a continued recovery [but] it won't feel terrific," citing the weak employment picture. In sort of a delayed response, stocks staged a last-minute rally on Tuesday. In the end, the Dow Jones ( DJIA ) managed a triple-point gain, but remains below resistance at both the 10,000 level and its 10-day moving average. The S&P 500 Index ( SPX ) added 1.1%, finding support at the 1,040 level. Traders remain cautious this morning. In addition to the Beige Book, traders are looking at Europe, with the European Central Bank meeting Thursday and its leader delivering a speech today. At last check, DJIA and SPX futures are slightly above fair value. Finally, the CBOE Market Volatility Index ( VIX ) eased nearly 8%.

Navistar International ( NAV ) said fiscal second-quarter net income rose to $30 million, or 42 cents a share, from $12 million, or 16 cents a share, while sales fell to $2.74 billion from $2.81 billion. Substantial U.S. military sales of trucks, increased Brazilian engine demand and the avoidance of losses after a year-earlier settlement with Ford contributed to the profit growth. NAV is sticking to its annual guidance for earnings between $2.75 and $3.25 a share on revenue of $2.7 billion. Analysts polled expected earnings of 0 cents a share on revenue of $2.7 billion.

Pall Corp. ( PLL ) said late Tuesday that its fiscal third-quarter profit rose to $69.7 million, or 58 cents a share, from $44.2 million, or 37 cents a share, in the year-ago period. Revenue for the quarter increased to $616 million from $555.9 million a year ago. Analysts estimated earnings of 50 cents a share on revenue of $595.9 million.

Earnings Preview

On the earnings front, Ciena Corp. ( CIEN ) and The Men's Wearhouse Inc. ( MW ) are scheduled to release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,141,322 call contracts traded on Tuesday, compared to 800,111 put contracts. The resultant single-session put/call ratio arrived at 0.70, while the 21-day moving average came in at 0.66.

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 a little stronger this morning; seven of the 10 markets that we follow are in positive territory. The cumulative average return on the group stands at a gain of 0.31%. In Asia, stocks closed mixed. Investors are awaiting a speech from European Central Bank ( ECB ) chief Jean-Claude Trichet later in the day, ahead of an ECB meeting on Thursday, for clues on whether it will announce fresh steps to ease strains from the euro zone's debt crisis. European shares were also mixed in early trading, as news of strong export numbers from China in May rekindled hopes for a global economic recovery. Retailer Inditex rose after posting forecast-beating first-quarter profits. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .

Overseas markets

Currencies and Commodities

The U.S. dollar is trading slightly lower this morning against strength in the euro, with the U.S. Dollar Index down 0.31% in pre-market trading. Elsewhere, crude futures are climbing back as the the most active contract was up 60 cents at $72.59 per barrel. Finally, gold has dropped this morning, falling $7.80 to sit at $1,237.80 an ounce in London.

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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This article appears in: Investing , Options


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