The Dow Jones Industrial Average (DJIA) is trading roughly 44.5
points below fair value this morning, with the S&P 500 Index
(SPX) on track for an opening loss of about 4.6 points. Wall Street
remains under pressure from fears of spreading contagion in the
euro zone, with Spain and Portugal seen as the next potential
targets in the wake of Ireland's bailout. On the home front, Merck
& Co. (
) is weighing on the DJIA, plunging nearly 8% in premarket
activity, while retail stocks will be front and center again, after
the National Retail Federation announced that Cyber Monday
attracted an estimated 107 million shoppers - up 10% from a year
Technically, the Dow rebounded from a triple-digit loss on Monday,
as a late-session rally helped the blue chip barometer to reclaim
psychological support at the 11,000 level. It was the DJIA's fourth
such rebound in nine sessions. Given the poor disposition of U.S.
stock futures heading into the open, Wall Street bulls will be
pressured to extend this streak. The SPX, meanwhile, is facing a
similar technical showdown, with the broad-market index bouncing
along support in the 1,175 area. Both the DJIA and the SPX are at
risk of ending the month with losses.
In equity news, pharmaceutical concern Merck & Co. Inc. (
) announced that Kenneth C. Frazier has been appointed as chief
executive officer and president. Frazier will also serve on the
company's board. The appointments are effective on Jan. 1,
Elsewhere, Lowe's Companies Inc. (
) reiterated its 2010 earnings forecast for a profit of $1.37 per
share to $1.40 per share. The company also backed its 2010
same-store sales growth forecast of 1% to 2%, as well as its total
sales growth expectations of 3% to 4%. Analysts are currently
looking for 2010 earnings of $1.41 per share. Lowe's also said that
it will announce new strategies to "serve what it called more
exacting consumers." "In no way are we stepping away from the
retail operations that are the foundation of our success, but we
recognize that the store experience alone is not enough for
customers today," Chief Executive Robert Niblock said.
Finally, ABB Ltd. (
) announced that it is buying Baldor Electric Co. (
) for $4.2 billion, including $1.1 billion in debt. BEZ shares have
surged 40% in premarket trading.
On the earnings front, Barnes & Noble Inc. (
), Trina Solar Limited (TSL), and OmniVision Technologies Ltd.
(OVTI) are slated to release their quarterly reports. Keep your
for more news as it breaks.
The Case-Shiller 20-city index for September will be released
today, along with the Chicago purchasing managers'index for
November, and the November consumer confidence survey. Wednesday
will be busy. ADP and Challenger, Gray & Christmas will 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 for Wednesday, as
is the October construction spending and auto sales reports.
Weekly initial jobless claims arrive on Thursday, 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.
Equity option activity on the Chicago Board Options Exchange
(CBOE) saw 964,930 call contracts traded on Monday, compared to
682,920 put contracts. The resultant single-session put/call ratio
arrived at 0.71, while the 21-day moving average rose to 0.60.
**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 is divided this morning, as half of the 10
foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a loss of
0.36%. In Asia, regional markets declined on fears of further
monetary tightening measures out of Beijing, pushing the Shanghai
Composite to a seven-week low. What's more, Japanese shares tagged
a two-week nadir after data showed a rise in unemployment and a
drop in industrial production for October. European markets,
meanwhile, are treading water just above breakeven, as traders
continue to debate the extent of the region's sovereign debt
crisis. Despite concerns that the contagion could spread to Spain
and Portugal, yields on Spanish government bonds soared.
Currencies and Commodities
Currency traders continue to punish the euro this morning, with
fears of European debt contagion running rampant across the region.
So far this morning, the euro has broken below the $1.30 level, the
currency's first breach of this region since September. Weakness in
the euro has translated into strength for the greenback, as the
U.S. Dollar Index has added 0.41% to trade at 81.17 in premarket
activity, placing the index in contention with former
support/resistance in the 81.50 region. Meanwhile, crude futures,
which typically trade inversely to the greenback, have given back
some of Monday's gains, with the lead contract off 33 cents at
$85.40 per barrel. Gold futures, however, are bucking the
downtrend, adding $7.60 to trade at $1,375.10 an ounce in
Unusual Put and Call Activity:
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