Opening View: DJIA Shakes Off Euro Zone Woes to Trade Flat Ahead of Data Deluge

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The Dow Jones industrial Average (DJIA) appears to be holding its own just below breakeven heading into the open this morning, as Wall Street digests more trouble for the Central Bank of Ireland and a downgrade of Spain's credit rating. Currently, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 8 points and 2 points below fair value, respectively. Within the Dow, American International Group Inc. ( AIG ) provided a sentiment boost by announcing plans to pay off its debt to the U.S. taxpayer. However, quite a bit could change ahead of the bell, especially given the veritable flood of economic data slated for release this morning, including jobless claims, second-quarter gross domestic product, and the Chicago PMI. Look for the DJIA to hold support near 10,750, with resistance near 10,900, while the SPX should find a floor at 1,130, and a ceiling at 1,150.

In equity news, AIG announced plans to repay the entirety of its debts to U.S. taxpayers. AIG said it would pay back the Federal Reserve Bank of New York's $20 billion loan by the end of the first quarter of 2011. Other debt payments include $26 billion for its AIA and ALICO units, as well as $49 billion under the Troubled Asset Relief Program (TARP). According to the details of AIG's plan, the U.S. Treasury will receive 1.655 billion shares of AIG common stock, which the Treasury will sell over time in the open market.

Elsewhere, McCormick & Co. ( MKC ) posted a third-quarter profit of $102.4 million, or 76 cents per share, topping analysts' expectations for earnings of 59 cents per share. For the full year, McCormick raised its outlook to $2.67 to $2.71 per share, excluding a one-time tax benefit, from a prior view of $2.49 to $2.54 per share. Analysts were forecasting full-year earnings of $2.54 per share.

Earnings Preview

On the earnings front, Accenture plc ( ACN ) is slated to release its quarterly earnings report today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The pace picks up on the economic front today, with the arrival of the weekly report on initial jobless claims, the latest look at second-quarter gross domestic product, and the Chicago purchasing managers' index ( PMI ). Friday will be chock full of economic data. The Commerce Department alone will report on August construction spending, personal income and spending, and September auto sales, while the University of Michigan will give us a final look at consumer sentiment in September and the Institute for Supply Management will release its September manufacturing index.

Market Statistics

Equity option activity on the CBOE saw 1,168,894 call contracts traded on Wednesday, compared to 657,776 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average held at 0.59.

Volatility indices

NYSE and Nasdaq summary

**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 higher.**

Dow, S&P and Nasdaq futures

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Overseas Trading

Overseas trading remains in poor shape this morning, as only three of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a loss of 0.13%. In Asia, most indexes finished lower, with Japan leading the way with a nearly 2% decline as the yen resumed its march higher versus the U.S. dollar. The Japanese Nikkei was also pressured by news that Nintendo Co. had slashed its earnings outlook. Meanwhile, banks and financials are leading the retreat in Europe, after Moody's Investors Service downgraded Spain's credit rating to Aa1 from Aaa.

Overseas markets

Currencies and Commodities

With the threat of quantitative easing from the Fed on the horizon, the U.S. dollar's decline has quickened recently. The greenback has even given up earlier gains on the euro, which fell versus the dollar after Moody's downgrade of Spain's sovereign debt. At last check, the U.S. Dollar Index was off 0.24% at $78.51, its lowest level since January. Naturally, the dollar's extended decline is prompting a rise in commodities, with the December gold contract rising $4.70 to $1,315 an ounce in London, while crude futures are up 55 cents at $78.41 per barrel.

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 .

Unusual options activity - puts

Unusual options activity - calls

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: ACN , AIG , MKC , PMI

Schaeffer's Investment Research

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