Opening View: DJIA Futures Retreat Amid Dollar Concerns; Gold Tops $1,300


The Dow Jones industrial Average (DJIA) staged a late-session rebound on Tuesday, recovering from an 80-point loss to finish above the 10,850 level for only the second time since May. Heading into the open this morning, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 14 points and 1.5 points below fair value, respectively, as Wall Street's attention turns toward the falling U.S. dollar. The weak greenback has already helped push gold futures to another record high above $1,300 an ounce, while crude futures are trending higher ahead of this morning's report on U.S. petroleum supplies. Look for the DJIA to find support at 10,750 again, with resistance looming overhead at 10,900. Finally, the SPX maintains support at 1,135, while the 1,150 level could remain a roadblock for the index.

In equity news, Family Dollar Stores Inc. ( FDO ) reported that its fourth-quarter net income rose 23% to $74 million, or 56 cents per share, as sales advanced 8% to $1.96 billion. Analysts had been expecting earnings of 51 cents per share. Looking ahead, Family Dollar said it expects fiscal 2011 earnings of between $2.95 and $3.15 per share for fiscal 2011, versus Wall Street's expectations for a profit of $2.96 per share. The company also said its board has authorized the repurchase of up to $750 million in stock.

Also in earnings news, Sealy Corp. ( ZZ ) swung to a third-quarter net loss of $15.8 million, or 16 cents per share. Excluding one-time items, the company would have earned 4 cents per share. Revenue decreased 1% to $346.2 million. Analysts had forecast the company to earn 5 cents per share on revenue of $365.2 million.

Earnings Preview

On the earnings front, Actuant Corp. ( ATU ), and American Greetings Corp. ( AM ) are slated to release their quarterly earnings reports today. Keep your browser at for more news as it breaks.

Economic Calendar

The usual weekly report on U.S. petroleum supplies will hit the Street later this morning, while tomorrow brings the weekly report on initial jobless claims, the latest look at second-quarter gross domestic product, and the Chicago purchasing managers' index. Friday will be chock full of economic data. The Commerce Department alone will report on August construction spending, personal income and spending, and September auto sales, while the University of Michigan will give us a final look at consumer sentiment in September and the Institute for Supply Management will release its September manufacturing index.

Market Statistics

Equity option activity on the CBOE saw 1,070,489 call contracts traded on Tuesday, compared to 646,093 put contracts. The resultant single-session put/call ratio arrived at 0.60, 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 is in the dumps this morning, with only three of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a loss of 0.09%. Asian markets finished mostly higher on Wednesday, with Japanese stocks bolstered by the Bank of Japan's better-than-expected September tankan survey. However, Chinese stocks slipped as concerns persisted that Beijing could further tighten policies in the wake of upbeat manufacturing data. Across the pond in Europe, regional indexes staged a broad retreat, despite signs of improvement in the European Commission's monthly economic sentiment index.

Overseas markets

Currencies and Commodities

The U.S. dollar extended its backslide versus the Japanese yen, with the greenback pulling back toward the ¥82.85 level it hit just before the Bank of Japan intervened in the currency markets. At last check, the U.S. Dollar Index was off 0.30% at 78.78. The dollar's weakness has helped propel gold futures to yet another record high, with the December contract rising $2.90 to $1,311.20 in London. Finally, crude futures are also benefiting from the weaker dollar, rising 0.22% to $76.35 per barrel.

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: AM , ATU , FDO , ZZ

Schaeffer's Investment Research

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