Opening View: DJIA Futures Rebound; China Fears Overblown?

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The Dow Jones Industrial Average (DJIA) plunged more than 160 points on Tuesday, closing below the psychologically important 11,000 level following a surprise interest rate hike out of China. But it would appear that some on Wall Street feel the sell-off was overdone, as futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 50 points and 6.4 points above fair value heading into the open. That said, another round of earnings is slated to hit the Street today, including reports from Boeing Co. ( BA ), eBay Inc. ( EBAY ), and Wells Fargo & Co. ( WFC ). Look for the DJIA to try to reclaim the 11,000 level, with support at 10,900 and resistance at 11,100. Meanwhile, the SPX should continue to trade between 1,160 and 1,175.

In equity news, blue chip pharmaceutical concern Pfizer Inc. ( PFE ) is paying $240 million for a 40% stake in Laboratorio Teuto Brasileiro S.A., a leading Brazilian generic drug firm. Teuto will also receive a performance-based milestone payment. The deal includes an option by Pfizer to acquire the remaining 60% stake of Teuto's shares starting in 2014.

Juniper Networks ( JNPR ) fell 3% in after hours trading after the company reported non-GAAP net income of $171.5 million, or 32 cents per share, after the close last night. Revenue jumped nearly 23% to $1.01 billion. Analysts were expecting earnings of 32 cents per share on revenue of $1.02 billion for the period.

Elsewhere, Yahoo! Inc. (YHOO) reported third-quarter net income of $396.1 million, or 29 cents per share, on revenue of $1.12 billion. The company's earnings included a 13 cents per share benefit from the sale of HotJobs. Analysts had expected Yahoo to report third-quarter earnings of 15 cents per share, and $1.13 billion in net revenue.

Earnings Preview

On the earnings front, Abbott Laboratories (ABT), BlackRock Inc. (BLK), Delta Air Lines Inc. (DAL), Genzyme Corp. (GENZ), Manpower Inc. (MAN), U.S. Airways Group Inc. (LCC), E*Trade Financial Corp. (ETFC), Netflix Inc. (NFLX), Seagate Technology plc (STX), and Xilinx Inc. (XLNX) will release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The usual weekly report on U.S. petroleum supplies and the Fed's Beige Book for October will arrive today. Tomorrow, the Labor Department's weekly initial jobless claims figures are on tap, alongside the Conference Board's September leading indicators, and the Philadelphia Fed's manufacturing index. We end the week on a quiet note, as there are no major economic reports scheduled for Friday.

Market Statistics

Equity option activity on the CBOE saw 1,487,792 call contracts traded on Tuesday, compared to 1,038,752 put contracts. The resultant single-session put/call ratio arrived at 0.70, while the 21-day moving average rose to 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 has a slight positive bias this morning, as six of the 10 foreign indexes that we track are in positive territory. However, the cumulative average return on the collective is in negative territory, resting on a loss of 0.11%. In Asia, stocks bounced off the morning's lows, in a sign that the initial sell-off following China's surprise interest rate hike late Tuesday was overdone. European shares edged higher after minutes from the Bank of England's Monetary Policy Committee boosted expectations of more quantitative easing, while Novo Nordisk gained on news of a rival's setback.

Overseas markets

Currencies and Commodities

The U.S. Dollar Index has reversed course today, as investors returned cautiously to the equities market following yesterday's China-induced sell-off. So far, the index has fallen 0.6% to 77.72. Crude futures are also recovering, as the front-month contract has soared 1.26% to $81.17 per barrel. Finally, gold future are also recovering from Tuesday's losses, adding $5 to $1,341 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: BA , EBAY , JNPR , PFE , WFC

Schaeffer's Investment Research

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