The Dow Jones Industrial Average (DJIA) rallied 3.1% in October,
despite stagnating near the end of the month. Unfortunately, the
reasons for this stagnation have yet to pass, with the midterm
elections taking place tomorrow, and the Federal Open Market
Committee's (FOMC) decision on monetary policy, interest rates, and
quantitative easing arriving on Wednesday. However, solid
manufacturing data out of China has broken the stalemate in
premarket trading, with futures on the DJIA and the S&P 500
Index (SPX) trading roughly 47.5 points and 6.7 points above fair
value, respectively. What's more, domestic manufacturing data will
arrive later this morning, in the form of the Institute for Supply
) manufacturing index for October. However, don't expect the DJIA
to stray outside support at 11,050 and resistance at 11,200. The
SPX should be similarly constrained between 1,190 and 1,180.
In earnings news, Humana Inc. (
) said that its third-quarter net profit rose 30% on a
year-over-year basis to $393.2 million, or $2.32 per share, as
revenue climbed 9.2% to $8.42 billion. Analysts had been expecting
earnings of $1.67 per share on revenue of $8.43 billion. Humana
said it now expects fiscal 2010 earnings of between $6.40 and $6.50
per share, versus analysts' expectations for a profit of $6.28 per
Elsewhere, Loews Corp. (
) reported that its third-quarter net income fell 92% to $36
million, or 9 cents per share. Adjusted earnings were $364 million
compared with $468 million. The latest results reflect a charge for
a transaction under which Loews's CNA Financial (CAN) unit ceded
certain legacy environmental-related liabilities to National
Finally, Baker Hughes Inc. (
) reported that its third-quarter earnings tripled to $255 million,
or 59 cents per share, from $55 million, or 18 cents, in the
year-earlier period. Revenue rose 83% to $4.08 billion from $2.23
billion. Wall Street was looking for a profit of 47 cents per share
on revenue of $3.68 billion.
On the earnings front, Allergan Inc (
), Cooper Tire & Rubber Co. (CTB), Corning Incorporated (GLW),
IntercontinentalExchange Inc. (ICE), American Financial Group
(AFG), Anadarko Petroleum Corp. (APC), and Evergreen Solar Inc.
(ESLR) will release their quarterly reports today. Keep your
for more news as it breaks.
We begin the week with reports on September personal income and
spending, construction spending, and the Institute for Supply
) manufacturing index for October today. Tomorrow is devoid of
economic reports, though it is election day, so get out there and
vote. The big news on Wednesday will likely be the Federal Open
Market Committee's decision on monetary policy and interest rates.
Also on tap for Wednesday are the ISM's services index for October,
October auto sales, September factory orders, and the weekly report
on U.S. petroleum supplies. The weekly initial jobless claims
report comes out on Thursday, and we round out the week with
October's nonfarm payrolls and unemployment rate.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,231,552 call contracts traded on Friday, compared to
685,314 put contracts. The resultant single-session put/call ratio
arrived at 0.56, while the 21-day moving average held at 0.60.
**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
Overseas trading has a bullish bias this morning, as seven of
the 10 foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a gain of
0.72%. In Asia, regional indexes rallied in the wake of
surprisingly strong manufacturing data from China. Meanwhile, the
Bank of Japan pushed its next meeting forward from mid-November to
Nov. 4-5, in a move seen as a precaution in case Japan's central
bank needs to respond to the U.S. Fed's action. Meanwhile, European
markets are trading flat, as traders remain in a holding pattern
ahead of U.S. elections and the Fed's decision on monetary
Currencies and Commodities
The U.S. dollar dipped lower in Asian trading, giving back all
of its earlier gains versus the Japanese yen. Earlier in the
session, there had been speculation in the currency pits that Japan
would intervene on behalf of the yen once again, pushing the
greenback higher against the yen. However, with the Federal Open
Market Committee's meeting coming to a close on Wednesday, the U.S.
Dollar Index is headed lower once again, slipping 0.08% to 76.97.
Commodities, which typically trade inversely to the dollar, have
found some lift this morning, with crude futures up 79 cents at
$82.22 per barrel, while gold futures have added $5.40 to $1,363 an
ounce in London.
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our
Open Interest Configurations
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
for free daily delivery, straight to your inbox, before the
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.