Opening View: DJIA Set to Resume Battle with 12,400; MON Could Rain on Bulls' Parade

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The market's positive momentum sputtered out on Tuesday afternoon, resulting in a day of modest losses -- but U.S. stocks are currently set to kick off the session on a high note, following suit with their overseas counterparts. Ahead of the open, gold futures have soared to a new record high, while crude oil futures have maintained a perch atop $108 per barrel. Against this backdrop, the Dow Jones Industrial Average (DJIA ) is poised to resume battle with the 12,400 level, while the S&P 500 Index (SPX ) is flirting with a 7-point lead. However, lackluster earnings guidance from Monsanto (MON - 73.32) could rain on the bulls' parade.

Dow, S&P and Nasdaq futures

In equities news, American Superconductor (AMSC - 24.88) last night warned of a fourth-quarter loss, and said it now expects quarterly revenue of less than $42 million. Analysts, on average, were calling for a fourth-quarter profit of 32 cents per share on sales of $119 million. In addition, the firm slashed its full-year profit projection to less than $355 million, compared to its prior guidance for sales of $430 million to $440 million. The maker of wind-turbine gear said the "primary cause" of the trimmed estimates was a recent refusal of shipments by Sinovel Wind Group, which represented about 70% of AMSC's revenue in 2009. In pre-market action, the shares of AMSC have fallen more than 44%.

Meanwhile, after spending Tuesday in halted-trading limbo, Optimer Pharmaceuticals (OPTR - 13.80) last night said a Food and Drug Administration (FDA) advisory panel voted unanimously to recommend the firm's experimental antibiotic for the treatment of Clostridium difficile infection ( CDI ). According to Thomson Reuters, the drug is expected to generate sales of about $203 million. The FDA is expected to unveil its final decision on fidaxomicin by May 30. At last check, OPTR is on pace to give up about 3%.

Meanwhile, DISH Network (DISH - 24.31) confirmed that it won the auction for bankrupt Blockbuster Inc.'s assets, with the media mogul's bid valued at $320 million, the Wall Street Journal reported. After adjusting for items such as available cash and inventory, DISH said it expects to pay about $228 million in cash for the assets. The deal is expected to close sometime in the second quarter. At last check, DISH is trading 0.2% lower.

On the earnings front, Monsanto Company ( MON ) said fiscal second-quarter net income jumped 15% on solid seed sales and improved profit margins. For the quarter, the agricultural issue earned $1 billion, or $1.88 per share. Excluding items, MON earned $1.87 per share, surpassing analysts' expectations for per-share earnings of $1.84. Looking ahead, though, the company expects full-year earnings to dock between $2.66 and $2.79 per share, falling short of the Street's estimate of full-year earnings of $2.86 per share. Ahead of the bell, MON has surrendered 0.7%.

Earnings Preview

Today we'll hear earnings reports from MSC Industrial Direct ( MSM ), Apogee Enterprises ( APOG ), Bed Bath & Beyond ( BBBY ), Immucor (BLUD), and Ruby Tuesday (RT). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar today will feature the weekly crude inventories report, plus the Mortgage Bankers Association's (MBA) mortgage applications index. Thursday will bring us weekly jobless data and February's consumer credit report, while the economic agenda winds down on Friday with the release of the government's wholesale inventories report.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,201,700 call contracts traded on Tuesday, compared to 697,086 put contracts. The resultant single-session put/call ratio dipped to 0.58, while the 21-day moving average fell to 0.61.

NYSE and Nasdaq summary

Volatility indices

Trading the News: A Contrarian View. Check out this special report from Bernie Schaeffer here.

Overseas Trading

Asian stocks were mixed today, with Chinese equities finishing higher in celebration of the country's recent rate hike. In Japan, meanwhile, stocks ended in the red on continued concerns about the pace of the post-earthquake recovery. Leading the laggards yet again was Tokyo Electric Power, which fell to an all-time low after being forced to dump radioactive waste into the Pacific Ocean. By the close, the Shanghai Composite tacked on 1.14%, while Japan's Nikkei finished 0.3% lower.

European markets were headed higher at last check, with banking stocks pacing the advancing equities on news that recently downgraded Portugal hosted a successful bond auction. In addition, Germany's Commerzbank AG was up more than 3% after announcing plans to sell shares and repay debt. Meanwhile, Electricite de France SA was leading the bearish minority, after France's government said it would freeze natural gas prices. At last check, London's FTSE 100 was up 0.6%, Germany's DAX has added almost 0.7%, and the Madrid General has rallied nearly 1.3%.

Overseas markets

Currencies and Commodities

The U.S. dollar is trending lower this morning, as the U.S. Dollar Index was seen hovering around 75.59. Elsewhere, crude futures have backpedaled from 30-month highs, but remain above the $108-per-barrel marker. In electronic trading, the May crude futures contract has given back 0.1% to flirt with $108.21 per barrel. Finally, gold futures have continued their quest for record highs, as China's unexpected rate hike has whetted investors' appetites for a currency hedge. At last check, the front-month contract has added nearly 0.6% to trade at $1,460.80 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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Unusual options activity - puts

Unusual options activity - calls

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This article appears in: Investing , Options

Referenced Stocks: APOG , BBBY , CDI , MON , MSM

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