The Dow Jones Industrial Average (DJIA) closed above the 11,400
level for the first time since Nov. 8 on Friday, though the blue
chip barometer failed to follow its Wall Street brethren to a fresh
two-year high. That may change this morning, as futures on the DJIA
and the S&P 500 Index (SPX) are trading roughly 32 points and
4.4 points above fair value, respectively. Investor sentiment has
received a shot in the arm this morning, with a slew of merger and
acquisition activity, as well as clarity on Chinese monetary
policy, which doesn't include an interest rate hike.
Technically, the DJIA enters the final expiration week of 2010
resting above potential round-number support at the 11,400 level,
but below its 2010 peak near 11,450. Should 11,450 fall, look for
11,500 to offer at least a modicum of resistance before the DJIA
heads higher. Support lies at the 11,300 level. As for the SPX, the
index is trading at its highest point since September 2008, and is
within earshot of potential psychological resistance at the 1,250
level. Support for the SPX should hold near the 1,230 level.
In equity news, General Electric Co. (
) announced that it will buy Wellstream Holdings PLC for $1.3
billion. Under terms of the deal, GE is offering 780 pence in cash
and a special dividend of 6 pence in cash per Wellstream share.
Wellstream's board intends to unanimously recommend shareholders
accept the deal, expected to close in the first quarter of 2011,
according to a statement from GE.
In other merger and acquisition news, Sanofi-Aventis SA (
) announced that it is extending its $18.5 billion offer for
Genzyme Corp. (
) until Jan. 21, 2011. Genzyme has rejected the offer, saying it is
too low to even start negotiations.
Elsewhere, Wal-Mart Stores Inc. (
) said that it is closing its Moscow representative office due to
the lack of an "clear acquisition partner in the near term."
Wal-Mart said it will continue to pursue market entry opportunities
in the country.
On the earnings front, only FuelCell Energy Inc. (
) is on the docket. Keep your browser at
for more news as it breaks.
There are no major economic reports scheduled for release today,
while tomorrow offers up the November producer price index,
November retail sales, and October business inventories. The
Federal Open Market Committee is also slated to step up on Tuesday
to deliver its decision on U.S. monetary policy, with Fed watchers
expecting the central bank to hold steady on its "extended period"
language on interest rates.
Wednesday is packed with data, as the November consumer price
index, the December Empire State manufacturing index, November
industrial production, the National Association of Home Builders'
housing market index, and the usual weekly report on U.S. crude
inventories are slated to arrive. Thursday is also busy, with
weekly jobless claims, November housing starts, and the Philly
Fed's December manufacturing index. The flood finally abates on
Friday, with only the Conference Board's leading indicators for
November slated for release
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 1,521,299 call contracts traded on Friday, compared to
645,998 put contracts. The resultant single-session put/call ratio
arrived at 0.42 while the 21-day moving average dropped to
**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
Overseas trading looks strong this morning, as all 10 foreign
indexes that we track are in positive territory. The cumulative
average return on the collective stands at a gain of 0.93%. Asian
markets engaged in a relief rally over night, after it became clear
that Beijing's current monetary policy did not include an interest
rate hike. In fact, the Shanghai Composite soared nearly 3% after
the People's Bank of China lifted banks' reserve ratio by half a
percentage point on Friday. The clarity on Chinese monetary policy
has also prompted a buying spree in Europe, leading to a global
rally in the equities market.
Currencies and Commodities
The lack of an interest rate hike out of China over the weekend
has had little effect on the U.S. dollar. In fact, the U.S. Dollar
Index is trading roughly 0.14% lower at 79.96, with the index
unable to reclaim the round-number 80 level in premarket trading.
Bolstered by strong gains in Asian trading, and a weak U.S. dollar,
crude futures are sharply higher this morning, with the front-month
contract up $1.32 at $89.63 per barrel. Finally, gold futures have
been bolstered by the lack of an interest rate hike out of Beijing.
At last check, gold futures were up $8.50 at $1,393.40 an ounce in
Unusual Put and Call Activity:
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Open Interest Configurations
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