Opening View: DJIA Futures Retreat as China Lifts Reserve Ratio

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The Dow Jones Industrial Average (DJIA) soared more than 170 points on Thursday, but enthusiasm for a potential solution to Ireland's debt crisis wasn't enough to power the DJIA past the 11,200 level and its 20-day moving average. Unfortunately, the DJIA may be hard pressed to make a serious run at overhead resistance today, as China is once again front and center after Beijing raised its reserve requirement ratio for banks. Along those lines, Federal Reserve Chairman Ben Bernanke criticized Beijing's currency policy, saying that China's undervalued currency is hurting the global economy. As a result, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 22 points and 3.7 points below fair value, respectively. Technical support for the Dow resides near 11,100, while the SPX should find a floor near 1,185.

In equity news, Harrah's Entertainment Inc. announced that it is canceling its $500 million initial public offering, "due to market conditions." Harrah's had planned to sell 31.25 million shares for an estimated price of $15 to $17 per share. The stock would have traded under the name Caesars Entertainment Corp. with a symbol of CZR.

On the earnings front, Dell Inc. ( DELL ) reported third-quarter income of $822 million, or 42 cents per share, on revenue of $15.4 billion. Adjusted income was 45 cents per share. Analysts had expected earnings of 33 cents per share, on revenue of $15.7 billion.

Elsewhere, Intuit Corp. ( INTU ) reported a net loss of $70 million, or 22 cents per share. On a non-GAAP basis, INTU lost 12 cents per share, as revenue grew to $532 million. Analysts were expecting a loss of 12 cents per share on revenue of $520.4 million. (Editor's note: The original version of this article incorrectly reported INTU's earnings.)

Salesforce.com Inc. ( CRM ) reported net income of $21.1 million, or 15 cents per share. Earnings on a non-GAAP basis would have been 32 cents per share for the recent period. Revenue grew 30% to $429 million. Analysts were expecting earnings of 31 cents per share on revenue of $409.8 million.

Earnings Preview

On the earnings front, AnnTaylor Stores Corp. ( ANN ), H.J. Heinz Co. ( HNZ ), and Yingli Green Energy Holding Co. Ltd. (YGE) will release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

There are no reports slated for release today. Looking ahead, we cram an entire week's worth of data into two days due to the Thanksgiving holiday. There are no reports slated for release on Monday, while Tuesday offers up the second estimate on third-quarter gross domestic product, accompanied by October's existing home sales. The Street will be drenched in data on Wednesday, with October's personal income and spending reports, October durable goods orders, weekly initial jobless claims, November's University of Michigan consumer sentiment index, October's new home sales, weekly U.S. petroleum supplies, and the minutes from the most recent Federal Open Market Committee (FOMC) meeting. The market is closed for Thanksgiving on Thursday, and there are no economic reports slated for release on Friday.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,535,754 call contracts traded on Thursday, compared to 832,801 put contracts. The resultant single-session put/call ratio arrived at 0.54, 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

Overseas Trading

Overseas trading is struggling once again this morning, as only three of the 10 foreign indexes that we track are trading in positive territory. The cumulative average return on the collective stands at a loss of 0.41%. In Asia, markets ignored the possibility for a weekend rate hike out of Beijing, closing mostly higher on the session. Along those lines, the People's Bank of China announced after the close of regular trading that it will raise banks' reserve requirement ratio by half of a percentage point on Nov. 29. Meanwhile, European markets are broadly lower as traders search for safe havens ahead of any weekend developments in Ireland's debt crisis. European Union and International Monetary Fund representatives are currently in Dublin to discuss potential solutions.

Overseas markets

Currencies and Commodities

More weakness for the U.S. dollar is having a modest buoying effect on commodities this morning. As Europe comes closer to sorting out Ireland's debt issues, the euro has advanced against the greenback, sending the U.S. Dollar Index lower by 0.4% to 78.30 at last check. Meanwhile, crude futures have added 11 cents to $82.53 per barrel, and gold for December delivery had added $4.50 to trade at $1,357.50 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: ANN , CRM , DELL , HNZ , INTU

Schaeffer's Investment Research

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