Opening View: DJIA Futures Pressured by Weak European Data

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The Dow Jones Industrial Average (DJIA) soared more than 128 points on Friday, as Wall Street cheered a round of stronger-than-expected economic data, including the addition of 67,000 new private sector jobs. However, the Dow was unable to overtake resistance in the 10,450 region, which is home to its 200-day moving average. This overhead resistance, combined with pressure on overseas banks and a drop in Germany's manufacturing orders in July, is having a negative impact on pre-market trading. Specifically, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 54 points and 8 points below fair value, respectively. Look for support to materialize near 10,350 for the Dow, while the SPX may find a short-term floor in the 1,095 region. Finally, the CBOE Market Volatility Index (VIX) closed Friday at its lowest level since May 3. While the VIX may benefit from weakness in the equities market today, look for the index to meet with resistance near the 23.50 region, which is home to its 200-day moving average.

In equities news, shares of Barclays PLC ( BCS ) have fallen more than 3% in London after the company said that Robert Diamond, the head of its investment-banking arm, would become its new group chief executive starting early next year. Diamond will succeed John Varley, who has occupied the position since 2004.

Elsewhere, shares of Oracle Corp. ( ORCL ) have jumped more than 5% in pre-market trading after the company announced that former Hewlett-Packard Co. ( HPQ ) CEO Mark Hurd will become its new president. Hurd was also named to Oracle's board.

Earnings Preview

On the earnings front, Casey's General Stores Inc. ( CASY ), Navistar International Corp. ( NAV ), The Pep Boys ( PBY ), and Phillips-Van Heusen Corporation ( PVH ) will release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

There are no major economic reports scheduled for release on today. The Fed's Beige Book for September will be released on Wednesday, along with the usual weekly report on U.S. petroleum supplies. We'll get the weekly report on new jobless claims, along with the trade balance report from the Commerce Department. There are no major economic reports scheduled or Friday.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 926,551 call contracts traded on Friday, compared to 521,730 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average held at 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 in poor shape this morning, as only three of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a loss of 0.55%. In Asia, regional markets finished mixed, with Japan's Nikkei dipping sharply once again due to renewed strength in the yen. Chinese steel companies, however, headed mostly higher on hopes for higher steel prices. European markets, meanwhile, are broadly lower after Germany's economics minister reported that manufacturing orders dropped 2.2% in July from the previous month. Analysts were expecting a rise of 0.5%.

Overseas markets

Currencies and Commodities

Despite Friday's rally in the equities market, risk aversion is once again taking hold of investors, and many are retreating to the safe haven of the U.S. dollar. Heading into the open this morning, the U.S. Dollar Index has added 0.66% to trade at 82.58. The rising dollar has pummeled oil prices, with the lead crude contract down 2.28% at $72.90 per barrel. Finally, gold futures are down $3.50 at $1,247.60 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

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This article appears in: Investing , Options


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