Opening View: DJIA Futures Point Higher on Earnings and M&A Activity

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DELL GENZ key technical hurdle

On the sentiment front, a Bank of America-Merrill Lynch Global Research survey yesterday noted that emerging market exposure among money managers suffered its biggest decline in the survey's history. Commenting on the report, Todd Salamone, Senior Vice President of Research, noticed that the 50-day buy-to-open put/call volume ratio on the iShares MSCI Emerging Markets Index Fund ( EEM ) had recently rolled over near the ratio's December 2010 peak. Todd noted that the activity "does not look like hedge activity, but rather speculative activity that has potentially climaxed," and believes that this could have bullish implications for EEM.

In earnings news, Deere & Co. ( DE ) posted a first-quarter profit of $513.7 million, or $1.20 per share, as sales rose 27% to $6.12 billion. Wall Street analysts were expecting a profit of 97 cents per share on revenue of $5.59 billion. Looking ahead, Deere said it sees second-quarter revenue rising by 25% over the same quarter last year. For fiscal 2011, the company is expecting net income of about $2.5 billion, compared to the current consensus estimate of $2.37 billion.

After the close last night, Dell Inc. reported a fourth-quarter profit of $927 million, or 48 cents per share, as revenue rose to $15.69 billion from $14.9 billion a year ago. On an adjusted basis, Dell said it earned 53 cents per share, blowing past Wall Street's estimate for a profit of 36 cents per share. However, revenue came in just shy of the consensus estimate for $15.75 billion. The company also said that it expects revenue growth of 5% to 9% for fiscal 2012.

Outside of earnings, Comcast Corp. ( CMCSA ) announced that it is increasing its annual dividend by 19% to 45 cents per share. The dividend will be payable on April 27 to shareholders of record as of April 6. The company also announced plans to buy back $2.1 billion in stock by the end of 2011.

Finally, while the news leaked to the Street late in yesterday's session, Sanofi-Aventis SA (SNY) officially confirmed this morning that it has reached a deal to buy Genzyme Corp. for $20.1 billion in cash plus a contingent value right. The deal values GENZ at $74 per share. The acquisition has been approved by boards of both companies, and is expected to close early in the second quarter of 2011.

Earnings Preview

On the earnings front, Nvidia (NVDA), NetApp (NTAP), Abercrombie & Fitch (ANF), OfficeMax (OMX), and Genzyme ( GENZ ) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today offers up the latest word on January's housing starts and building permits, the January producer price index (PPI), the twin industrial production and capacity utilization reports for January, the weekly U.S. petroleum supplies report, and the minutes from the most recent Federal Open Market Committee (FOMC) meeting. More data on domestic inflation arrives tomorrow, with the release of January's consumer price index (CPI). Also on Thursday's docket are weekly initial jobless claims, leading economic indicators, and the Philadelphia Fed business outlook survey. The economic calendar is bare on Friday.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,364,445 call contracts traded on Tuesday, compared to 754,566 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average edged higher to 0.56.

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

Trading the News: A Contrarian View. Check out this special report from Bernie Schaeffer here.

Overseas Trading

Overseas trading is pointed broadly higher this morning, as nine of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.47%. Asian markets headed higher on Wednesday, with investor tensions easing in the wake of China's latest data on inflation. Japan's Nikkei extended its rally to three straight sessions, with exporters rallying on a weaker yen. Meanwhile, European stocks are trading broadly higher, as Sanofi-Aventis' deal to purchase Genzyme provided a shot in the arm for investor sentiment.

Overseas markets

Currencies and Commodities

After sliding to an 11-week low yesterday, crude futures are looking to reclaim their footing this morning. With the official government report on weekly U.S. petroleum supplies set for release later today, the March crude contract has added 40 cents to trade at $87.97 per barrel. A weak U.S. dollar is helping provide ballast for commodities this morning, with the greenback extending its decline versus the euro. However, the greenback continues to edge higher versus the yen, extending its push into eight-week high territory versus the Japanese currency. As a result, the U.S. Dollar Index has dipped 0.16% in premarket trading. Finally, gold futures are off 60 cents at $1,373.50 an ounce in London, with the malleable metal struggling to extend yesterday's solid gains.

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: CMCSA , DE , DELL , EEM , GENZ

Schaeffer's Investment Research

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