Opening View: DJIA Futures Dip Ahead of Fed Minutes

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The Dow Jones Industrial Average (DJIA) could be headed for a rough session, as anxiety is sweeping Wall Street ahead of the release of minutes from the Federal Reserve's September policy meeting. Uncertainty ahead of technology bellwether Intel Corp.'s ( INTC ) quarterly earnings report is also weighing on traders in premarket trading. As such, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 43 points and 3.7 points below fair value, respectively. If these losses carry over into the open, we could see the Dow battling for support at 11,000. In fact, the blue chip barometer could even test support at the 10,900 or 10,800 levels if the market's reaction to the Fed minutes is harsh enough. As for the SPX, the broad-market index should find a floor near 1,160, or at 1,150 if selling pressure gains momentum.

In equity news, Johnson Controls Inc. ( JCI ) said that it expects to post fiscal 2011 earnings of $2.30 to $2.45 per share - an increase of between 17% and 25% on a year-over-year basis. Revenue is seen growing approximately 9% to $37 billion, Johnson Controls added. "We are substantially increasing our investments to drive organic growth," said CEO Stephen Roell. "Higher capital expenditures in 2011 will support the significant growth opportunities in our power solutions business and further expansion in all of our businesses in the fast-growing geographic market," he added. Analysts are forecasting fiscal 2011 earnings of $2.39 per share on sales of $36.33 billion.

Elsewhere, Barclays Capital affirmed its "overweight" rating on Apple Inc. ( AAPL ). Barclays analyst Ben A. Reitzes also lifted his target price to $385 per share from $340 per share. "Even at this market cap Apple is the best growth play in the IT-hardware segment, with prospects for significant double-digit organic revenue growth for several more years," the analyst wrote.

Finally, Lions Gate Entertainment Corp. ( LGF ) proposed a merger with MGM in a deal that would give the latter company 55% of the combined entity, the Los Angeles Times reported. In a statement this morning, investor Carl Icahn, who is offering to buy all of Lions Gate for $7.50 per share, said he supported the proposed merger.

Earnings Preview

On the earnings front, Fastenal Company ( FAST ), CSX Corp. ( CSX ), Intel Corp. ( INTC ) and Linear Technology Corp. ( LLTC ) will release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The Federal Open Market Committee will release the minutes of its most recent meeting later today, while tomorrow offers up September's import and export data, and the Treasury's budget numbers for September. Weekly initial jobless claims and the weekly report on U.S. petroleum supplies arrive on Thursday, along with the September producer price index and the August trade balance. Friday will be busy once again, with September the consumer price index, retail sales, the New York Fed's Empire State manufacturing index, and the University of Michigan's consumer sentiment index for October.

Market Statistics

Equity option activity on the CBOE saw 1,222,569 call contracts traded on Monday, compared to 728,197 put contracts. The resultant single-session put/call ratio arrived at 0.60, while the 21-day moving average held at 0.59.

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 in poor shape this morning, as only one of the 10 foreign indexes that we track is in positive territory. The cumulative average return on the collective stands at a loss of 0.69%. While mainland China bucked the trend, the rest of Asia finished solidly in the red. Japan led the way, with exporters selling off sharply due to the continued rise in the yen. Across the pond in Europe, a sell-off in commodities has pressured miners, which are leading a broad retreat across the region. On the economic front, British consumer price inflation came in at 3.1% in September, unchanged from August, according to the Office for National Statistics. The core rate was also unchanged at 2.7%.

Overseas markets

Currencies and Commodities

Strength in the U.S. dollar is sapping the commodities market this morning. Rallying against pretty much every benchmark currency, except the Japanese yen, the dollar is weighing heavily on gold and crude futures. At last check, the U.S. Dollar Index was up 0.39% at 77.75. Meanwhile, gold futures have fallen $9.10 to $1,345.30 an ounce in London. Finally, even the Organization of the Petroleum Exporting Countries' (OPEC) upwardly revised outlook for world oil consumption has failed to buoy crude prices. In electronic trading, the front-month crude contract has fallen 82 cents to $82.19 per barrel.

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.



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