Opening View: DJIA Set to Open With Modest Gains

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U.S. stock futures are pointed modestly higher today, as the Street embraces positive economic data on the domestic front, and a well-received bond auction for Italy. While no major economic reports are slated for release today, investors are hopeful that yesterday's promising consumer confidence report will outshine mediocre housing data from S&P/Case Shiller , and lay the groundwork ahead of tomorrow's always-important weekly jobless claims and pending home sales report. Across the pond, all eyes are on Italy, after the debt-ridden country saw bond yields cool considerably at an auction of six-month notes. Against this backdrop, the Dow Jones Industrial Average (DJIA) is set to open 21 points above fair value, while the S&P 500 Index (SPX) is looking at a 3-point gain.

Dow, S&P and Nasdaq futures

In earnings news, Piedmont Natural Gas Company, Inc. (PNY - 34.33) early this morning reported full-year earnings. For 2011, PNY banked a profit of $113.6 million, or $1.57 per share, compared to last year's profit of $142 million, or $1.96 per share. The total reflects PNY's transfer of a 30% stake in Southstar Energy Services to AGL Resources, with the after-tax gain on the sale totaling $30.3 million, or 42 cents per share. Revenue, meanwhile, fell 8% to $1.43 billion. Looking ahead, the natural gas distributor reaffirmed its fiscal 2012 outlook, calling for a profit of $1.58 to $1.68 per share. Analysts, meanwhile, are calling for earnings of $1.65 per share. PNY also declared a quarterly dividend of 29 cents per share to holders of record as of the close on Dec. 27.

After Tuesday's close, Cavium (CAVM - 28.48) slashed its fourth-quarter revenue forecast, citing weaker-than-expected results across its enterprise and consumer markets, which was "further exasperated by a larger than expected impact of a hub transition at one of its major customers." The company now expects quarterly revenue to range between $56 million and $57 million, down from its previous guidance of $61 million to $62.3 million. Due to the softer sales volumes, CAVM anticipates that gross margin will be roughly one percentage point lower than previously predicted. The microprocessor specialist is tentatively scheduled to unveil its fiscal fourth-quarter results in late January or early February. CAVM is 6% lower in pre-market trading.

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

The MBA mortgage index is slated to hit the Street today. Weekly jobless claims are due out on Thursday, and pending home sales are also on the day's docket. Plus, traders will receive the government's update on petroleum supplies one session later than usual, due to Monday's holiday. The abbreviated week wraps up on Friday with the release of the Chicago purchasing managers index (PMI).

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 484,883 call contracts traded on Tuesday, compared to 346,280 put contracts. The resultant single-session put/call ratio arrived at 0.71, while the 21-day moving average was 0.70.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended mostly lower today, due in part to disappointing factory data out of Japan. Industrial production dropped by a steeper-than-forecast 2.6% in November, as heavy flooding in Thailand took its toll on regional manufacturing activity. Against this shaky economic backdrop, commodity stocks were among the day's notable laggards. However, Shanghai-listed stocks ended slightly higher, recovering some of their recent losses. By the close, South Korea's Kospi shed 0.9%, Hong Kong's Hang Seng declined 0.6%, Japan's Nikkei gave up 0.2%, and China's Shanghai Composite crept 0.2% higher.

The major European indexes are pointed higher at midday, with traders cheering a successful Italian bond auction. The cash-strapped country sold short-term notes at a relatively tame average yield of 3.25%, relieving some anxieties about another debt sale slated for Thursday. At last look, the French CAC 40 and London's FTSE 100 are both 0.6% higher, while the German DAX has gained 0.1%.

Overseas markets

Currencies and Commodities

The greenback is pointed south this morning, with the U.S. dollar index last seen fractionally lower. Crude oil is on track to break its six-day winning streak , with the front-month contract 0.6% lower, but still maintaining a perch above the psychologically significant century mark. Likewise, gold futures are on track to rack up a fifth straight day of losses, as the malleable metal is looking at a 0.5% drop, to trade at $1,588.30 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

Due to technical issues, the Unusual Put and Call Activity charts are unavailable today. We apologize for any inconvenience.

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This article appears in: Investing , Options

Referenced Stocks: CBOE

Schaeffer's Investment Research

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