Opening View: DJIA Set for Triple-Digit Jump Amid Hopes for European Debt Resolution


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U.S. stocks are poised to continue where they left off this morning, with the bulls once again in control ahead of the bell. Bolstering pre-market sentiment are hopes for a resolution to the European debt drama, with expectations high ahead of a meeting between German Chancellor Angela Merkel and Greek Prime Minister George Papandreou. Furthermore, speculation that the European Central Bank (ECB) may soon cut rates, as well as news that officials are considering a plan to leverage the European Financial Stability Fund (EFSF) and recapitalize certain banks, is also fueling pre-market optimism. At last check, the Dow Jones Industrial Average (DJIA) is headed for another triple-digit jump, while the broader S&P 500 Index (SPX) is trading about 20 points north of fair value.

Dow, S&P and Nasdaq futures

In earnings news, Walgreen (WAG - 36.03) reported an adjusted profit of 57 cents per share for its fiscal fourth quarter, surpassing analysts' expectations for a per-share profit of 55 cents. Meanwhile, revenue rose 6.5% to $18 billion, topping the Street's projections for quarterly sales of $17.92 billion. In addition, WAG said same-store sales jumped 4.4%, while prescription sales -- which accounted for 65.4% of total sales for the quarter -- climbed 5.7%. In pre-market trading, WAG is up 0.8%.

Elsewhere, Accuride (ACW - 8.13) last night cut its full-year forecast, citing "market conditions," "performance issues," and a "slower-than-anticipated turnaround in performance at our Gunite business." The manufacturing concern now expects bottom-line earnings to range between a profit of 4 cents and a loss of 5 cents per share, with sales projected between $950 million and $975 million. Previously, ACW forecast 2011 earnings of 40 cents to 50 cents per share on sales of $950 million to $1 billion. Separately, the company also announced the sale of its Fabco Automotive subsidiary. At last check, ACW is headed for an 8% drop out of the gate.

In equities news, Renren Inc. (RENN - 5.35) last night agreed to acquire -- one of China's video-sharing websites -- for $80 million. Renren said it expects the deal to close sometime in the fourth quarter, and hopes will help it better integrate video applications with its social networking site. Ahead of the bell, RENN is pointed 9.9% higher.

Earnings Preview

Today's earnings docket will also feature reports from American Greetings ( AM ), Accenture ( ACN ), Jabil Circuit ( JBL ), Sealy Corp. ( ZZ ), and Paychex ( PAYX ). Keep your browser at for more news as it breaks.

Economic Calendar

Today, the Street will be graced with the S&P/Case-Shiller home price index for July, the Conference Board's gauge of consumer confidence for September, and the Richmond Fed manufacturing index. Last month's durable goods data will be released on Wednesday, along with the regularly scheduled crude inventories report. On Thursday, the economic agenda heats up with the final second-quarter gross domestic product (GDP) figures, pending home sales data for July, and the usual weekly jobless claims on tap. Finally, 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 919,383 call contracts traded on Monday, compared to 543,907 put contracts. The resultant single-session put/call ratio arrived at 0.59, while the 21-day moving average was 0.70.

NYSE and Nasdaq summary

Volatility indices

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Overseas Trading

Benchmark indexes in Europe are also on the upswing, as hopes are high that regulators may finally be near a plan to contain the region's debt crisis. Traders are looking forward to that scheduled meeting today between German Chancellor Merkel and Greek Prime Minister Papandreou, as Greece attempts to appease bailout officials to secure a much-needed tranche of aid. At last check, the German DAX and the French CAC 40 are both 4.3% higher, and London's FTSE 100 has tacked on 3.1%.

Overseas markets

Currencies and Commodities

The greenback is trading lower this morning, with the U.S. dollar index down 0.6% at last check. Crude futures, meanwhile, have extended yesterday's rebound, with the front-month contract up $2.18, or 2.7%, ahead of the bell. What's more, gold futures have bounced back from their recent drubbing, advancing $76.90, or 4.8%, to climb back atop $1,600 an ounce. At last check, the malleable metal was flirting with the $1,671.70-an-ounce level.

Currencies and commodities

Unusual Put and Call Activity:

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Unusual options activity - puts

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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.

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This article appears in: Investing , Options
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