Opening View: DJIA Futures Soar 100 Points on Strong Overseas Data

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The Dow Jones Industrial Average (DJIA) once again staged an afternoon rebound Tuesday to reclaim support at the 11,000 level by the close. Given the positive news rolling in from overseas, the bulls' tenacity has paid off, with futures on the DJIA and the S&P 500 Index (SPX) trading roughly 113 and 12.3 points above fair value, respectively. Specifically, Chinese manufacturing data arrived better than expected, while the U.K.'s purchasing managers' index soared to a 16-year high. What's more, the cost of ensuring Portugal's and Spain's sovereign debt also fell, sparking a rally in the euro zone banking sector.

Technically, the DJIA could be set to blow past short-term resistance at the 11,100 level, an area that is also home to the Dow's 10-day moving average. However, the blue chip barometer is still staring up at potentially staunch resistance at the 11,200 level, where the DJIA's 20-day trendline resides. As for the SPX, the broad-market index should be able to put some space between it and support at the 1,175 level. The index could find some turbulence near the 1,190 level, with the 1,200 possibly capping the day's advance.

In equity news, Brown-Forman Corp. (BF) announced a special dividend of $1 per share for its Class A and Class B common stock. Shareholders of record as of Dec. 10 will receive the payout on Dec. 28. "This special dividend underscores the strength of our company's balance sheet and cash flows, and it reinforces our belief that returning cash to shareholders plays an important role in producing superior long-term total shareholder returns," the Louisville, Ky, spirits maker said.

Finally, JPMorgan initiated coverage on several financial services companies. Specifically, the brokerage firm started American Express Co. ( AXP ) at "overweight," while initiating coverage on Capital One Financial Corp. ( COF ) and Discovery Financial Services ( DFS ) with a "neutral" rating.

Earnings Preview

On the earnings front, Charming Shoppes Inc. ( CHRS ), Aeropostale Inc. ( ARO ), Collective Brands Inc. (PSS), Jo-Ann Stores Inc. (JAS), Krispy Kreme Doughnuts (KKD) and Zumiez Inc. (ZUMZ) are slated to release their quarterly reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar will be busy today. ADP and Challenger, Gray & Christmas kick off three successive days of jobs data, with the former reporting on private sector growth in November, and the latter releasing data on layoffs. The Institute for Supply Management's (ISM) manufacturing index for November is also on tap today, as is the October construction spending and auto sales reports.

Weekly initial jobless claims arrive tomorrow, while Friday brings the much anticipated nonfarm payrolls and the unemployment rate for November, which will be accompanied by October factory orders and the ISM's services index for November.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,068,602 call contracts traded on Tuesday, compared to 624,305 put contracts. The resultant single-session put/call ratio arrived at 0.58, while the 21-day moving average held at 0.58.

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 has come roaring back this morning, with all 10 of the foreign indexes that we track in positive territory. In fact, the cumulative average return on the collective stands at a gain of 1.35%. Strong Chinese manufacturing data and weakness in the U.S. dollar provided lift for regional markets in Asia, though gains were limited in Shanghai due to concerns that this latest report would spur Beijing to additional interest-rate increases. Meanwhile, European markets are sharply higher this morning, with banks leading the way as the cost of insuring Spanish and Portuguese sovereign debt fell. What's more, the U.K.'s purchasing managers' index hit a 16-year high, adding to this morning's contingent of solid overseas economic data.

Overseas markets

Currencies and Commodities

With equities back in fashion today, the U.S. dollar has lost its safe-haven appeal. Furthermore, the falling cost of ensuring euro-zone debt and a strong demand for a Portuguese bond auction lifted the euro, helping the currency to rebound from its recent lows versus the greenback. At last check, the U.S. Dollar Index was off 0.5% at 80.79. As you might expect, weakness in the dollar has been a boon for commodities. Crude futures have soared 1.52% to $85.39 per barrel, extending November's 3.2% gain. What's more, gold futures have jumped $10.70 to $1,396.80 an ounce in London, as the malleable metal looks to expand upon its 2.1% gain last month.

Currencies and commodities

Unusual Put and Call Activity:

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Unusual options activity - puts

Unusual options activity - calls

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This article appears in: Investing , Options

Referenced Stocks: ARO , AXP , CHRS , COF , DFS

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