Opening View: DJIA Pointed South Ahead of Final Session of Sour Quarter

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U.S. stocks are pointed lower this morning, as investors digest uninspiring economic data from China and await another round of reports on the home front. Specifically, China's manufacturing sector contracted for a third straight month in September, exacerbating concerns about the health of the global economy. Against this backdrop, Wall Street is anxious ahead of the Institute for Supply Management's ( ISM ) report on Chicago-area manufacturing, as well as the government's personal income and spending data. In addition, a notable gauge of consumer confidence is slated for release later this morning, which could also set the tone for the last session of the third quarter. In pre-market trading, the Dow Jones Industrial Average (DJIA) is trading 90 points south of fair value, while the tech-rich Nasdaq Composite (COMP) is set to extend yesterday's retreat.

Dow, S&P and Nasdaq futures

In earnings news, Micron Technology, Inc. (MU - 5.87) said it swung to a fourth-quarter loss of $135 million, or 14 cents per share, down from its year-ago profit of $342 million, or 32 cents per share. Meanwhile, revenue fell 14% to $2.14 billion. MU's results were mixed, however, as the Street had forecast earnings of a penny per share on revenue of $2.11 billion. The semiconductor company claims that significantly lower prices for its memory chips are to blame for the quarterly loss. MU also reported that gross margin fell to 15% from 22% in the third quarter, while analysts were expecting gross margin of 20.48%. At last check, MU is set to open 5.8% lower.

Meanwhile, DemandTec (DMAN - 6.05) reported a second-quarter loss of $4.4 million, or 13 cents a share, compared to a loss of $2.9 million, or 9 cents per share, in the year-ago period. Excluding items, DMAN lost 2 cents per share, matching the consensus estimate. Similarly, revenue rose 8% to $22.02 million, in line with Wall Street's expectations.

Finally, Ingersoll-Rand (IR - 31.96) this morning trimmed its third-quarter and full-year earnings and revenue forecasts, citing a stronger dollar and lower-than-expected demand for security systems in North America. Now, the company anticipates third-quarter earnings of 77 cents to 80 cents per share on revenue of $3.9 billion to $3.95 billion. Previously, IR forecast third-quarter earnings of 85 cents to 95 cents per share on $4.05 billion to $4.15 billion in sales. Meanwhile, the company projected full-year earnings of $2.70 to $2.80 per share on revenue of $14.85 billion to $15 billion, down from its previous estimates for a per-share profit of $2.90 to $3.10 on sales of $15.3 billion to $15.5 billion. Ahead of the bell, IR is bracing for a 5.5% drop.

Earnings Preview

There are no other earnings reports of note today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

We'll wrap up the week with reports on personal income and spending for August, the latest Reuters/UMich sentiment index, and the Chicago purchasing managers index ( PMI ).

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 768,438 call contracts traded on Thursday, compared to 620,753 put contracts. The resultant single-session put/call ratio arrived at 0.81, while the 21-day moving average was 0.72.

NYSE and Nasdaq summary

Volatility indices

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Overseas Trading

Major European indexes are in the red at midday, pressured by weak manufacturing data out of China and an unexpectedly steep rise in euro-zone inflation. Data released today showed a 3% increase in annual consumer prices, marking the largest jump in nearly three years. As a result, traders are now anxious that inflationary concerns could preclude a highly anticipated interest-rate cut from the central bank. At last check, the German DAX is down 3%, the French CAC 40 is off 2%, and London's FTSE 100 is 1.6% lower.

Overseas markets

Currencies and Commodities

The greenback has gained ground against its foreign rivals, with the U.S. dollar index up about 0.4% at last check. Crude futures, meanwhile, have given back most of Thursday's gains, with the front-month contract down 57 cents, or 0.7%, at $81.57 per barrel. On the other hand, gold futures have erased yesterday's modest decline, tacking on $6.50, or 0.4%, to trade near $1,623.80 an ounce.

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 .

**Due to an issue with our data provider, the Unusual Options Activity charts are unavailable today. We apologize for any inconvenience.

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: CBOE , ISM , PMI

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