Opening View: DJIA Futures Flat Amid Flurry of M&A Activity

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The Dow Jones Industrial Average (DJIA) soared more than 165 points on Friday, as Fed chair Ben Bernanke reassured Wall Street that the nation's central bank is far from impotent and, in fact, is ready to step in where needed to support the economy. The reassurance wasn't enough to push the Dow positive for the week, but it did push the blue-chip barometer back above support in the 10,100 region. However, the S&P 500 Index (SPX) failed to retake the 1,065 region, which could provide a bit of resistance early this week. Heading into the open, futures on the DJIA and the SPX are trading relatively flat compared to fair value, as stocks bounce from earlier lows due to a raft of merger and acquisition activity, including deals between Intel Corp. ( INTC ) and Infineon Technologies AG ( IFNNY ), and 3M Company ( MMM ) and Cogent Inc. ( COGT ). Looking ahead, traders should expect quite a bit of volatility, though any actual directional movement may be limited, as three days of U.S. jobs data will kick off on Wednesday, with the ADP's private sector jobs report, and end on Friday with August's nonfarm payrolls report.

In merger and acquisition news, Intel Corp. ( INTC ) announced that it is buying Infineon Technologies AG's ( IFNNY ) wireless-solutions business for about $1.4 billion cash. Infineon provides cellular platforms to wireless phone makers. Intel said that the acquisition bolsters its Internet-connectivity business, enabling it to offer "the full range of wireless options, from Wi-Fi and 3G to WiMAX and LTE," said President and Chief Executive Paul Otellini.

Elsewhere, 3M Company ( MMM ) said that it is buying Cogent Inc. ( COGT ) for $10.50 per share. The deal values COGT at $943 million. The offer represents a premium of about 15% to COGT's close at $8.92 per share on Friday. Cogent is a biometric identification firm, whose products capture fingerprint and palm print images electronically, encode prints into searchable files, and compare a set of prints to a database.

Finally, Time Warner Cable ( TWC ) and Walt Disney Co. ( DIS ) are near a deal to extend coverage of major football games over ESPN and popular programming over ABC, according to The Wall Street Journal . The companies have been negotiating the fees that TWC pays to offer local ABC-TV stations to its subscribers. People familiar with the matter told the Journal that the two sides expect to reach a deal before Thursday's deadline.

Earnings Preview

On the earnings front, Origin Agritech Ltd. ( SEED ) and Winn-Dixie Stores Inc. ( WINN ) will release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The Commerce Department will release personal income and spending reports for July later this morning. Tomorrow, the Case-Shiller home price index, the Chicago Purchasing Managers' Index, and the Conference Board's Consumer Confidence Index for August will be released. The ADP report on private sector job growth in August will kick off three days of employment data on Wednesday, followed by the Institute for Supply Management's ( ISM ) manufacturing index for August, the July construction spending report for July, and auto sales for August. We'll get the weekly report on new jobless claims on Thursday, along with July reports on factory orders and pending home sales. The hammer drops on Friday with the Labor Department's numbers on nonfarm payrolls and the unemployment rate in August. The ISM will also release its services index for August.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 998,262 call contracts traded on Friday, compared to 571,444 put contracts. The resultant single-session put/call ratio arrived at 0.57, while the 21-day moving average slipped to 0.63.

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 mixed, as five of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.36%. In Asia, a brief decline in the Japanese yen provided a boost for Nikkei, with exporters leading the way higher. However, the results of the Bank of Japan's emergency policy meeting fell short of expectations, allowing regional markets to finish off their session highs. Across the pond in Europe, U.K. markets were closed for a holiday, as the rest of the region heads lower. Disappointment that the Bank of Japan didn't go far enough is weighing on the region, overshadowing the latest round of merger and acquisition activity, including Sanofi-Aventis' bid for Genzyme Corp.

Overseas markets

Currencies and Commodities

The Japanese yen remains front and center in currencies trading, as the Bank of Japan failed to stem the currency's advanced against the U.S. dollar, despite a round of emergency easing. While the yen initially moved lower following news that the Bank of Japan expanded its quantitative-easing program by ¥10 trillion and six months, the Japanese currency has since resumed its trek higher. The U.S. Dollar Index is only fractionally lower in pre-market trading, slipping 0.10% to 82.84 at last check. Elsewhere, crude futures are also lower this morning, despite a weaker dollar. In electronic trading, the lead contract is down 26 cents at $74.91 per barrel. Finally, gold futures are up 30 cents at $1,238.20 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.



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This article appears in: Investing , Options


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