Opening View: DJIA May Test 10,000 Again; VIX Holds Above 40

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It's been one step forward, two steps back for the Dow Jones Industrial Average ( DJIA ) lately. The blue-chip barometer received a surge of buying pressure on Friday, after being bombarded by selling pressure earlier in the week. However, Dow futures are indicating that Wall Street is set for a sell-off on the open later this morning, with the DJIA trading about 94 points below fair value. Look for technical support near 10,100 and 10,000 for the Dow. As for the S&P 500 Index ( SPX ), futures on the broad-market indicator are pointing toward an opening dip of 12.4 points. The SPX should find support near 1,065 (the site of its May 6 "flash crash" lows), while resistance looms overhead near 1,095 and 1,100. Finally, the CBOE Market Volatility Index ( VIX ) spiked to a high of 48.20 on Friday, nearing its 1997 and 1998 peaks, as well as its two crests in the first bear market of the new millennium. According to Todd Salamone, Senior Vice President of Research, in this week's edition of Monday Morning Outlook , "If the 'European Contagion' does not have the negative systemic risk brought on by the Lehman Brothers bankruptcy and our own credit crisis in late 2008 and early 2009, the bulls may find the VIX high on Friday as an extremely encouraging development."

In earnings news, Campbell Soup Co. ( CPB ) said that it earned $168 million, or 49 cents per share, in the third quarter. On an adjusted basis, the company said it earned 54 cents per share, topping analyst expectations for 51 cents per share. Sales rose 7% to $1.8 billion. For the fiscal year, Campbell Soup expects adjusted earnings-per-share growth in the range of 9% to 11%.

Finally, Sprint Nextel Corp. ( S ) was upgraded to "buy" from "neutral" at Goldman Sachs. The brokerage firm also lifted its price target to $6 per share from $3.50 per share. According to Goldman, Sprint is about to "move the needle on churn." With fewer subscribers up for grabs, the brokerage firm believes that Sprint has done a better job of retention. S shares were up more than 4% in pre-market trading.

Earnings Preview

On the earnings front, Yingli Green Energy Hold. Co. Ltd. ( YGE ), and Phillips-Van Heusen Corp. ( PVH ) are slated to release their quarterly earnings reports. Keep your browser at for more news as it breaks.

Economic Calendar


Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 2,120,716 call contracts traded on Friday, compared to 1,863,997 put contracts. The resultant single-session put/call ratio arrived at 0.88, while the 21-day moving average rose to 0.65.

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 mixed this morning, as only four of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a loss of 0.08%. In Asia, most indexes rose, with the Chinese market's strong performance offering support to its peers in the region but investors continued to keep a wary eye on the debt problems in the euro zone. Over the weekend in Europe, the Bank of Spain said it was taking over the running of Spanish savings bank CajaSur after its planned merger with another of the country's small lenders failed. That weighed on the euro already hurt by worries about the impact of deep public spending cuts in Greece, Spain and Portugal. European shares were mixed on Monday, with gains capped as investors remained concerned the euro zone crisis could hurt global growth. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .

Overseas markets

Currencies and Commodities

The U.S. Dollar Index is marching higher again this morning, rising 1.19% to trade at 86.39. The dollar's renewed strength is applying pressure to crude prices, with the front-month contract down 23 cents at $69.81 per barrel. Finally, gold futures are trading higher in London this morning, rising $9 to $1,185.10 an ounce after plunging more than 4% last week.

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

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This article appears in: Investing , Options

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