Opening View: DJIA Futures Slip as Wall Street Consolidates Gains

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The Dow Jones Industrial Average (DJIA) could be headed lower today, as Wall Street bulls look to catch their breath and take some profit off the table following last week's impressive run higher. Specifically, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 36 points and 3.75 points below fair value, respectively. Renewed European debt concerns and a strengthening U.S. dollar are weighing on stocks in premarket trading, and while there are no economic reports slated for release, Fed watchers may tune into a speech by St. Louis Federal Reserve Bank President James Bullard later this morning. Look for the DJIA to find support in the 11,350-11,400 region, while resistance remains in the 11,450-11,500 area. As for the SPX, the broad-market index should trade between 1,220 and 1,230.

In equity news, Ashland Inc. ( ASH ) announced that it is selling its global distribution business to TPG Capital for $930 million. The unit employs around 2,000 people and generates annual revenue of around $3.4 billion. The deal is expected to close before the end of March 2011. "I believe the outlook for the distribution business and its employees will be much stronger as part of an organization targeting growth within the distribution marketplace," said Ashland CEO James O'Brien.

Elsewhere, Estee Lauder Companies ( EL ) was upgraded to "overweight" from "equal weight" at Barclays Capital. The brokerage firm also lifted its price target to $81 per share from $69 per share. According to Barclays Capital, EL is "partnering with retailers to bring its high-service, high-touch model into specialty stores as well as beefing up its online presence."


Earnings Preview

On the earnings front, Frontier Communications Corp. ( FTR ), Sysco Corp. ( SYY ), Warner Chilcott plc (WCRX ), Clean Energy Fuels Corp. ( CLNE ), Clear Channel Outdoor Holdings Inc. (CCO), Convergys Corp. (CVG), Eagle Bulk Shipping Inc. (EGLE), LSK Solar Co. Ltd. (LDK), priceline.com Incorporated (PCLN), Silver Wheaton Corp. (SLW) and The Warnaco Group Inc. (WRC) will release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

There are no economic reports slated for release today, while September's wholesale inventories report arrives on Tuesday. We'll get the usual weekly report on crude inventories, along with the September trade balance figures on Wednesday. Thursday offers up the weekly initial jobless claims report, while Friday rounds out the week with the University of Michigan's first reading on November consumer sentiment.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 2,161,609 call contracts traded on Friday, compared to 923,541 put contracts. The resultant single-session put/call ratio arrived at 0.43, while the 21-day moving average fell 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

Overseas Trading

Overseas trading is mixed, with half of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a gain of 0.10%. Asian markets finished mostly higher, as Japanese investors cheered a recent bout of strong quarterly corporate earnings and a rise in sales for automakers. Meanwhile, European markets are trading broadly lower, as traders take profits in the wake of last week's rally. What's more, renewed debt concerns in Ireland and Portugal are weighing on sentiment across the region.

Overseas markets

Currencies and Commodities

The U.S. Dollar Index is headed higher this morning, with the greenback showing considerable strength versus the euro in the wake of renewed worries over debt problems in Ireland and Portugal. Meanwhile, Japanese Finance Minister Yoshihiko Noda told parliament that while they must work to limit the yen's continued advance, "there are advantages of yen rises," according to Dow Jones Newswires. At last check, the U.S. Dollar Index was up 0.65% at 77.09. The dollar's strength has been commodities' weakness. Specifically, crude futures have shed 43 cents to $86.42 per barrel in electronic trading, while gold has slipped $6 to $1,391.70 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: ASH , CLNE , EL , FTR , SYY

Schaeffer's Investment Research

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