Opening View: DJIA Futures Creep Higher; Oil Tops $106 per Barrel

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Technically, the DJIA enters today trading above its 10-day and 10-week moving averages, with additional short-term support in the 12,150-12,100 region. Resistance looms just overhead in the 12,200-12,250 area. The SPX, meanwhile, is still staring up at 1,333.58, which, as you may remember from Monday Morning Outlook , marks a double of the index's March 2009 low. Support remains in the 1,300-1,305 region.

In equity news, Western Digital ( WDC ) announced that it is buying Hitachi Global Storage from Hitachi Ltd. ( HIT ) for about $4.3 billion in cash and stock. According to the terms of the deal, Western Digital is shelling out $3.5 billion in cash and 25 million shares, leaving Hitachi with a 10% stake in WDC after the deal closes. "The proposed combination will result in a customer-focused storage company, with significant operating scale, strong global talent and the industry's broadest product lineup backed by a rich technology portfolio," Western Digital said.

Also, Ciena Corp. ( CIEN ) posted a first-quarter loss of $79.1 million, or 84 cents per share, compared to a loss of $53.3 million, or 58 cents per share, last year. Excluding $24 million in costs related to its purchase of Metro Ethernet Networks from Nortel, Ciena's adjusted loss was 14 cents per share. Revenue rose to $433.3 million, from $175.9 million. Wall Street was expecting a loss of 14 cents per share on revenue of $422.5 million. Looking ahead, Ciena expects second-quarter revenue of $415 million to $435 million, versus the consensus estimate for revenue of $439 million.

Earnings Preview

On the earnings front, Urban Outfitters ( URBN ), Perfect World ( PWRD ), and Casey's General Stores (CASY) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar kicks off today with updates on consumer credit and employment trends, as well as comments from Fed Presidents Dennis Lockhart and Richard Fisher. Tomorrow, we'll hear the latest report on chain-store sales from ICSC-Goldman Sachs, while Wednesday brings us word on wholesale inventories for January, the latest MBA mortgage applications survey, and the regularly scheduled update on domestic petroleum supplies from the Energy Information Administration (EIA). The weekly report on jobless claims hits the Street on Thursday, along with import/export data for January. We wrap up the week on Friday with the preliminary Thomson Reuters/University of Michigan consumer sentiment survey for March, along with comments from New York Fed President William Dudley.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,366,175 call contracts traded on Friday, compared to 774,977 put contracts. The resultant single-session put/call ratio arrived at 0.57, while the 21-day moving average rose to 0.58.

Volatility indices

NYSE and Nasdaq summary

Dow, S&P and Nasdaq futures

Trading the News: A Contrarian View. Check out this special report from Bernie Schaeffer here.

Overseas Trading

Overseas trading is mixed this morning, with six of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a gain of 0.05%. Asian stocks ended broadly lower due to soaring oil prices, though Shanghai stocks bucked the downtrend after Beijing detailed several economic goals in the wake of the country's annual legislative session. Meanwhile, Japanese stocks received additional pressure after Foreign Minister Seiji Maehara resigned due to the discovery of illegal political donations from a foreign national. In Europe, Moody's Investor Services cut its rating on Greece, but commodities and technology stocks have picked up the slack and are pushing the region higher.

Overseas markets

Currencies and Commodities

Indications that the Obama administration may tap into U.S. oil reserves have not been enough to offset renewed violence in Libya. In fact, news that Libyan president Muammar Gaddafi is retaliating against rebels, pushing the country closer to civil war, has sent oil futures to a new multi-year high of $106.39 per barrel in electronic trading this morning. Meanwhile, the U.S. Dollar Index is headed lower once again, providing additional upward pressure on commodities. At last check, the U.S. Dollar Index had slipped 0.33% to 76.16. Finally, gold futures have tagged another all-time high in London, hitting $1,443.30 an ounce before pulling back heading into the open on Wall Street. Currently, the April contract is up $12.70 at $1,441.30 an ounce.

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

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.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: CIEN , HIT , PWRD , URBN , WDC

Schaeffer's Investment Research

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