Opening View: DJIA Futures Falter as Bulls Catch Breath

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The Dow Jones Industrial Average (DJIA) shrugged off a round of lackluster economic data on Wednesday to close higher by nearly 50 points. Resistance at the 10,600 level held firm however, and the Dow appears to be consolidating in yet another trading range, bound on the lower side by support at the 10,500 level. Heading into the open, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 24 points and 3 points below fair value, respectively, indicating that the duo could be headed back toward short-term support levels. For the SPX, this means slipping back toward its 200-day moving average in the 1,116 region. Investors looking for a spot of excitement should take a closer look at gold, as the precious metal just set another record peak (above $1,277) in premarket trading.

In equity news, FedEx Corp. ( FDX ) reported first-quarter earnings of $380 million, or $1.20 per share, as sales rose 18% to $9.46 billion. Analysts were looking for earnings of $1.20 per share on sales of $9.4 billion. Looking ahead to the second quarter, FedEx forecast earnings in the range of $1.15 to $1.35 per share, just shy of Wall Street's view for $1.36 per share. For the full fiscal year, the company sees earnings in a range of $4.80 to $5.25 per share, surrounding the consensus estimate for earnings of $5.24 per share.

Elsewhere, NRG Energy Inc. ( NRG ) kept the merger-and-acquisition ball rolling on Wall Street by announcing that it is buying Green Mountain Energy Company for $350 million in cash. NRG said the acquisition fits its strategy to "become the clean energy provider of choice for Americans who want to make a difference for the environment." The company plans on running Green Mountain as a stand-alone business. NRG said it would fund the purchase with cash on hand, and expects the deal to close by the middle of November.


Finally, Barclays Capital upgraded Ford Motor Co. ( F ) to "overweight" from "equal weight," and lifted its price target on the shares to $16 from $15. "[Investors] appear to be ignoring the fundamental increase in Ford's earnings power even in a slower-growth environment," the brokerage firm wrote in a research note. That increase is "driven by favorable Ford product (and U.S. industry pricing) on top of a stripped-down cost base, even at flat share."

Earnings Preview

On the earnings front, Oracle Corp. ( ORCL ) and Research In Motion Limited ( RIMM ) are slated to release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today, we'll get the weekly report on new jobless claims, as well as the producer price index for August and the Philadelphia Fed's manufacturing report. Finally, the Labor Department will deliver the August consumer price index on Friday, while the University of Michigan will give its first peek at consumer sentiment in September.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,280,720 call contracts traded on Wednesday, compared to 699,052 put contracts. The resultant single-session put/call ratio arrived at 0.55, while the 21-day moving average slipped to 0.61.

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 looks pretty haggard 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 0.4%. Asian markets headed broadly lower, as investors worried that the People's Bank of China might raise interest rates. What's more, a report surfaced that Beijing may raise banks' capital adequacy ratios. A rally in exporters helped Japan weather the worst of the selling. Meanwhile, European stocks are also headed lower, with traders pulling back after an unexpected drop in U.K. retail sales.

Overseas markets

Currencies and Commodities

Gold futures are taking center stage once again this week, with the December contract rising to yet another record high this week. At last check, gold futures were up $8.10 at $1,276.80 an ounce. Providing lift for the malleable metal is fresh weakness in the U.S. dollar versus its foreign counterparts. The U.S. Dollar Index has slipped 0.45% to trade at 81.13 heading into the open. Finally, crude futures have been unable to capitalize on the dollar's weakness, slipping 64 cents to $76.48 per barrel in electronic trading.

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: CBOE , F , FDX , NRG , ORCL , RIMM

Schaeffer's Investment Research

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As of 12/19/2014, 04:15 PM


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