Opening View: DJIA Futures Edge Higher Ahead of FOMC


The Dow Jones Industrial Average (DJIA) added 18 points yesterday to close above the 11,400 level for only the fifth time since September 2008. Wall Street has carried over this positive bias into premarket trading this morning, as futures on the DJIA and the S&P 500 Index are trading roughly 19 points and 4 points above fair value, respectively. Traders will likely not stray far from breakeven early in the session, however, as the Federal Open Market Committee (FOMC) is slated to offer up its thoughts on U.S. monetary policy later this afternoon. But, before the Fed takes the stage, November retail sales data will hit the Street, with economists looking for a 0.6% increase.

Technically, the DJIA is looking for support to firm at the 11,400 level, while short-term resistance could materialize near the 11,450-11,500 region - an area that capped the Dow in November. Should Wall Street not react well to the Fed's remarks, a pullback to 11,300-11,350 isn't out of the question. As for the SPX, look for short-term support near 1,240, with the 1,230 region providing a backstop. Resistance for the broad-market index resides at the 1,250 level.

In equity news, Pfizer Inc. ( PFE ) announce that its board has elected George Lorch as non-executive chairman. The firm also lifted its first-quarter dividend by 11% to 20 cents per share. Ahead of the open, PFE has added about 0.41% following the news.

In merger and acquisition news, HCP Inc. ( HCP ) said that it is buying all of the real estate assets of privately owned nursing home operator HCR ManorCare Inc. for $6.1 billion in a cash and stock deal.

Pharmaceutical concern Amgen Inc. ( AMGN ) has jumped more than 7% in premarket trading, after the company reported positive data from a trial of its cancer drug Xgeva. "We look forward to presenting these landmark data at an upcoming medical conference," Amgen executive vice president of Research and Development Roger Perlmutter said in a statement.

Finally, Huntington Bancshares Inc. ( HBAN ) priced a previously announced $920 million common stock offering at $6.30 per share. The equity is off nearly 1% in electronic trading.

Earnings Preview

On the earnings front, Best Buy Co. Inc. ( BBY ) and Hovnanian Enterprises Inc. (HOV) are slated to release their quarterly reports. Keep your browser at for more news as it breaks.

Economic Calendar

The economic calendar offers up the November producer price index, November retail sales, and October business inventories today. The Federal Open Market Committee is also slated to step up today to deliver its decision on U.S. monetary policy, with Fed watchers expecting the central bank to hold steady on its "extended period" language on interest rates.

Wednesday is packed with data, as the November consumer price index, the December Empire State manufacturing index, November industrial production, the National Association of Home Builders' housing market index, and the usual weekly report on U.S. crude inventories are slated to arrive. Thursday is also busy, with weekly jobless claims, November housing starts, and the Philly Fed's December manufacturing index. The flood finally abates on Friday, with only the Conference Board's leading indicators for November slated for release

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,578,829 call contracts traded on Monday, compared to 703,197 put contracts. The resultant single-session put/call ratio arrived at 0.45 while the 21-day moving average dropped to 0.55.

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

Overseas Trading

Overseas trading is headed higher this morning, with seven of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a gain of 0.15%. Asian markets ended broadly higher, with South Korea's Kospi tagging a three-year high. European markets are mixed this morning, despite a pair of economic reports. In Germany, the ZEW economic sentiment indicator rose 2.5 points in December, while in the U.K., the annual consumer price inflation index rose to 3.3% in November, up from 3.2% in October.

Overseas markets

Currencies and Commodities

The U.S. Dollar Index continues to back away from resistance at the round-number 80 level this morning, dropping below the 79 level for the first time since late November. At last check, the index was seen lower by 0.41% at 78.96. As a result of the dollar's weakness, crude futures have trekked 20 cents higher to trade at $89.34 per barrel in premarket activity. Finally, gold futures are also headed higher, adding $10.10 to $1,408.10 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

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: AMGN , BBY , HBAN , HCP , PFE

Schaeffer's Investment Research

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