Opening View: DJIA Futures Higher Following Portugal Bond Auction

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The Dow Jones Industrial Average (DJIA) edged 35 points higher on Tuesday, with the blue chip barometer even making a run at 11,700 early in the session. We could see the Dow test this short-term technical hurdle once again today, as futures on the DJIA are trading roughly 58 points above fair value. Following suit, S&P 500 Index (SPX) futures are trading 6.6 points above fair value. Dovetailing with yesterday's news that Japan would be buying European debt, Portugal conducted a successful auction of government bonds this morning, passing a key credit test and lifting sentiment on Wall Street.

Technically, the DJIA rebounded from its 20-day moving average on Tuesday, reclaiming its 10-day trendline in the process. Look for the blue chip barometer to trade between the 11,600 and 11,750 levels for the short term. As for the SPX, the broad-market index continues to be squeezed into resistance in the 1,275 area, as support from its 10-day moving average rises into the area.

In earnings news, Chevron Corp. ( CVX ) said that it sees its fourth-quarter results topping the $3.77 billion profit it posted in the previous quarter. CVX also noted that margins in its "downstream" refining and marketing business will likely to show an improvement.

Also, Lululemon Athletica Inc. ( LULU ) raised its fourth-quarter profit outlook to between 55 cents to 57 cents per share. The company said that it sees sales in the range of $237 million to $239 million.


Elsewhere, J.P. Morgan Cazenove downgraded Goldman Sachs Group Inc. ( GS ) to "neutral" from "overweight" this morning. The brokerage firm said that it now prefers European investment banks to their U.S. peers. Analyst Kian Abouhossein said in a note to clients that the downgrade is due to valuation, but noted that Goldman also has the most to lose from new U.S. regulations.

Finally, ITT Corp. ( ITT ) announced that its board has unanimously approved a plan to split the company into three publicly traded firms. ITT will spin off its water-related businesses and defense technology segment into two new companies, leaving the manufacturing and engineering operations within the existing company. ITT said its shareholders will own stock in all three companies once the plan is completed, which is expected to happen before the end of the year.

Earnings Preview

On the earnings front, Clarcor Inc. ( CLC ) and Infosys Technologies Limited (INFY) are slated to release their quarterly reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The Fed will release its Beige Book for January later today, though the weekly report on U.S. petroleum supplies will hit the Street first. Tomorrow offers up the weekly report on initial jobless claims as well as December's producer price index, while Friday rounds out the week with December's consumer price index, retail sales figures, and industrial production numbers.

Market Statistics

Equity option activity on the CBOE saw 1,483,651 call contracts traded on Tuesday, compared to 798,543 put contracts. The resultant single-session put/call ratio arrived at 0.54, while the 21-day moving average held at 0.52.

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 strong this morning, as all 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 1.09%. Asian markets finished broadly higher on Wednesday, with commodities-related stocks providing strength. Meanwhile, European stocks are in rally mode, after Portugal auctioned 1.25 billion euros in 2014 and 2020 government bonds, passing a key test for credit markets. Later this week, Spain is auctioning 2016 bonds, and Italy will auction 2026 government bonds.

Overseas markets

Currencies and Commodities

The U.S. dollar is down versus the euro this morning, as the 16-nation currency gained strength in the wake of Portugal's bond auction. At last check, the U.S. Dollar Index was down 0.07% at 80.79. Commodities have rolled over from strength in Asian trading, despite the greenback's weakness. Crude futures have slipped 27 cents to $92.09 per barrel in electronic trading, while gold has edged $1.20 lower to $1,383.10 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: CLC , CVX , GS , ITT , LULU

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