Opening View: DJIA Futures Rally on Bank of Japan Rate Cut

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Thanks to a late-session buying spree, the Dow Jones Industrial Average (DJIA) rebounded from a triple-digit loss to close down 78 points. The blue-chip barometer also maintained key support at the 10,750 level. Wall Street is looking brighter this morning, as traders digest the Bank of Japan's surprise interest rate cut and prepare for the Institute for Supply Management's ( ISM ) services index. Futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 33 points and 4.4 points above fair value, respectively. Look for the Dow to hold support at the 10,750 level, while resistance remains at 10,900. As for the SPX, the index should find a floor at 1,135, while 1,150 remains a potentially significant roadblock.

In equity news, Wolverine World Wide Inc. ( WWW ) reported that third-quarter net income rose 27% to $34.1 million, or 70 cents per share. Analysts were looking for earnings of 67 cents per share. For the year, WWW now expects to earn $2.04 to $2.08 per share, compared to Wall Street's expectations for a full-year profit of $2.07 per share.

Elsewhere, The Mosaic Co. ( MOS ) reported first-quarter net income of $297.7 million, or 67 cents per share. Revenue increased to $2.19 billion from $1.46 billion. Analysts had forecast earnings of 71 cents per share on revenue of $1.96 billion.

Earnings Preview

On the earnings front, Yum! Brands, Inc. ( YUM ) will release its quarterly earnings report today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The Institue of Supply Management ( ISM ) offers up its services index for September today. We'll get the usual weekly report on U.S. petroleum supplies on Wednesday, along with the ADP report on September private sector employment. On Thursday, the Labor Department will release the weekly new jobless claims figures, while the Federal Reserve will report on consumer credit use in August. Finally, September's nonfarm payrolls report and unemployment rate will arrive on Friday, as will the Commerce Department's report on August wholesale inventories.

Market Statistics

Equity option activity on the CBOE saw 979,163 call contracts traded on Monday, compared to 599,286 put contracts. The resultant single-session put/call ratio arrived at 0.61, while the 21-day moving average held at 0.59.

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 solid this morning, as seven of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.33%. In Asia, regional markets were broadly higher after the Bank of Japan unexpectedly cut interest rates to near zero. China's markets remained closed for the National Day holiday, and will reopen on Friday, Oct. 8. In Europe, stocks are headed toward the end of a six-session losing streak, as the Japanese rate cut bolstered investor sentiment across the region.

Overseas markets

Currencies and Commodities

Gold is back in the headlines this morning, as the malleable metal tagged yet another record high after the Japanese rate cut. Gold for December delivery rose to an intraday high of $1,329.60 an ounce in London, but was last seen up $10 at $1,326.80 an ounce. Meanwhile, the U.S. Dollar Index is threatening to break below the 78 level for the first time since January. The greenback received a short-lived boost from the rate cut, but the dollar has refused to move far from its early morning lows. At last check, the index was off 0.48% at 78.07. Finally, crude futures are taking advantage of the weak dollar, rising 56 cents to $82.03 per barrel - just shy of their August peak.

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

Referenced Stocks: ISM , MOS , WWW , YUM

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