Opening View: DJIA Futures Flat Ahead of G-20 Outcome


Shutterstock photo

The Dow Jones Industrial Average (DJIA) backed away from challenging its 2010 highs on Thursday, as earnings-induced enthusiasm faded quickly. While heavyweights such as American Express Co. ( AXP ), Inc. ( AMZN ), and Verizon Communications Inc. ( VZ ) have released their quarterly reports already, Wall Street is transfixed by the Group of 20 (G-20) finance ministers meeting taking place in Seoul, South Korea. In fact, futures on the DJIA and the S&P 500 Index (SPX) are trading flat when compared with fair value, indicating that investors are unwilling to take up firm positions ahead of the outcome of this meeting. With the G-20 not coming to a close until tomorrow, we could be in for a rather tight trading range on the Street today. Look for the DJIA to struggle with resistance at 11,150 and 11,200, while maintaining support at 11,050-11,000. As for the SPX, the broad-market index should remain between 1,170 and 1,190.

In earnings news, Dow component Verizon Communications Inc. is trading fractionally lower in premarket trading, after the company said that its third-quarter earnings fell 25% to $881 million, or 31 cents per share, as revenue slipped 2.9% to $26.5 billion. Excluding one-time items, Verizon would have earned 56 cents per share. Analysts were looking for earnings of 54 cents per share.

Fellow Dow member American Express Co. is also trading fractionally lower ahead of the open, after the company announced last night that its third-quarter net income came in at $1.1 billion, or 90 cents per share, as revenue rose 17% to $7 billion. Wall Street was looking for earnings of 85 cents per share.

Outside the blue chip sector, Inc. announced quarterly net income of $231 million, or 51 cents per share, on revenue that rose 39% to $7.56 billion. Analysts were expecting earnings of 48 cents per share on revenue of $7.37 billion. However, AMZN was last seen lower by roughly 3.5% in electronic trading, as investors pan the company's forecast for fourth-quarter operating-margin of 3% to 4.2%. Wall Street had been expecting fourth-quarter operating margins of 5%.

Earnings Preview

On the earnings front, Honeywell International Inc. ( HON ), KeyCorp ( KEY ), and Schlumberger Limited (SLB) will release their quarterly reports today. Keep your browser at for more news as it breaks.

Economic Calendar

We end the week on a quiet note, as there are no major economic reports scheduled for release today. Looking ahead to next week, September's existing home sales arrive on Monday, while the Case-Shiller home price index for August and October's consumer confidence index are on tap for Tuesday. On Wednesday, September's durable goods orders, September's new home sales, and the weekly report on U.S. petroleum supplies are slated for release. Thursday offers up the usual report on weekly initial jobless claims, while Friday rounds out the week with an advance look at third-quarter gross domestic product, October's Chicago purchasing managers' index, and the final reading for the October University of Michigan consumer sentiment index.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,157,722 call contracts traded on Thursday, compared to 837,252 put contracts. The resultant single-session put/call ratio arrived at 0.72, 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

Overseas Trading

Overseas trading is in poor shape this morning, as only three of the 10 foreign indexes that we track are in positive territory. The cumulative average return rests at a gain of 0.01%. Across the globe, trading is cautious, though with a negative bias, as investors grow anxious ahead of the results of the current G-20 finance ministers meeting. In Asia, regional markets finished mixed due largely to currency tensions. However, technology stocks were strong in the wake of well-received earnings from LG Display Co. in Seoul. Across the pond in Europe, indexes are trading flat to lower, as early gains derived from strong corporate earnings have faded heading into midday trading.

Overseas markets

Currencies and Commodities

The short trade on the U.S. dollar is weakening this morning, as traders reconsider their positions ahead of the outcome of the G-20 meeting. Along currency lines, U.S. Treasury Secretary Timothy Geithner said that countries should "commit to refrain from exchange-rate policies designed to achieve competitive advantage by either weakening their currency or preventing appreciation of an undervalued currency." At last check, the greenback was trading mostly higher versus its foreign competitors, even though the U.S. Dollar Index has added a mere 0.07% to trade at 77.48. Of note, the dollar was last seen hovering just above a 15-year nadir versus the Japanese yen.

Predictably, gold futures are lower as the dollar rises, with the December contract off $5.50 at $1,320.10 an ounce in London. Crude futures, however, are headed higher despite the dollar's strength. In fact, the front-month crude contract has added 54 cents to trade at $81.10 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.

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

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing Options
Referenced Stocks: AMZN , AXP , HON , KEY , VZ

More from Schaeffer's Investment Research


Schaeffer's Investment Research

Schaeffer's Investment Research

Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by