Opening View: DJIA Futures Hint at Higher Open

By
A A A

The Dow Jones Industrial Average (DJIA) rallied to a 25-month peak on Tuesday, as the Street reacted to a promising report from the retail sector. However, with little in the way of earnings or economic news on tap for today, the question now becomes whether the blue chip barometer can continue its momentum. Futures are pointing to slight gains this morning, with Dow futures currently trading 13 points above fair value. Meanwhile, futures on the S&P 500 Index (SPX) are trading 2.5 points above fair value.

Despite a modest pullback on Tuesday morning, the Dow held steady above short-term support at the 11,550 level, rallying as high as 11,591 in afternoon trading. Adding additional technical support for the blue chip barometer is its 10-day trendline, which is located just above 11,500, and has supported the Dow since the start of December. Meanwhile, resistance lies at the 11,600 level for the Dow. However, let's not forget about the SPX, which also touched a new 25-month peak yesterday. In fact, the SPX rallied as high as 1,259 on Tuesday before retreating beneath resistance from the 1,260 level.

In equities news, insurance issue The Allstate Corporation ( ALL ) has sued Bank of America Corporation ( BAC ) and its Countrywide Financial unit over a $700 million investment ALL made in residential mortgage-backed securities. ALL claims that Countrywide misrepresented the risk on the investments.

Meanwhile, SAP AG ( SAP ) was ordered by a federal judge to pay interest on a $1.3 billion award that Oracle Corporation ( ORCL ) won against it in a November copyright infringement trial -- but not in the amount ORCL had originally asked for. On Tuesday, the judge denied ORCL's proposed interest calculation, but established a method for repayment using an average of historical Treasury yields.

Elsewhere, bakery behemoth Sara Lee Corp. ( SLE ) has agreed to sell its White King and Janola businesses to Symex Holdings Ltd for a cool $50 million. The businesses develop bleach and cleaning products for Australia and New Zealand, and generated roughly $28 million in 2009. SLE is hoping to close the deal during the first quarter.

Earnings Preview

There are no major earning reports currently scheduled. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today, we'll get the Energy Information Administration's weekly report on crude inventories.

Market Statistics

(Editor's note: The original post of this article inadvertently included all option activity on the CBOE in this section , rather than equity-only activity.)

Equity option activity on the CBOE saw 872,090 call contracts traded on Tuesday, compared to 485,755 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average held at 0.51.

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 looks strong this morning, as all 10 of the foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.71%. In Asia, stocks ended higher on Wednesday, as investors looked past China's recent interest rate increase and instead focused on banks and commodities. In fact, while the U.S. markets enjoyed fresh highs on Tuesday, analysts predict that the markets in Hong Kong and Shanghai will likely enjoy similar rallies in 2011. Elsewhere, Australia's market reopened following the extended Christmas holiday. Across the pond, European markets were mixed in the first post-holiday session.

Overseas markets

Currencies and Commodities

Despite Tuesday's disappointing consumer confidence and home sales reports, crude futures remain largely unchanged this morning. The Street is now focused on the weekly U.S. oil inventory report, with crude stockpiles expected to fall by 2.8 million barrels in the week ending Dec. 24. At last check, crude futures had backpedaled slightly this morning, shedding 0.5% to $91.06 per barrel. Meanwhile, the dollar has slumped 0.1% to sit at $80.26, while gold futures have slipped 0.1% to trade at $1,403.60 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.

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


This article appears in: Investing , Options

Referenced Stocks: ALL , BAC , ORCL , SAP , SLE

Schaeffer's Investment Research

Schaeffer's Investment Research
  • See all for Schaeffer's Investment Research
  • View Print Version

More from Schaeffer's Investment Research:

Related Videos

Budgeting for Baby
Budgeting for Baby                  
A Home to Retire In
A Home to Retire In                 

Stocks

Referenced

Most Active by Volume

71,432,726
  • $16.80 ▼ 1.47%
56,792,284
  • $13.28 ▼ 6.41%
48,287,629
  • $76.1026 ▼ 3.72%
46,299,615
  • $14.585 ▼ 1.39%
45,795,460
  • $3.42 ▼ 2.01%
45,427,624
  • $96.97 ▼ 1.84%
41,652,961
  • $98.91 ▼ 1.83%
35,729,074
  • $25.03 ▼ 0.56%
As of 10/1/2014, 03:25 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com