Opening View: DJIA, SPX Support Levels Breached, Bears Vie for Control

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The Dow Jones Industrial Average ( DJIA ) logged its first gain of the week yesterday, adding a whopping 4.9 points, but still closing below former support at the 10,300 level. The blue-chip barometer also gave up support at its 10-day moving average on Wednesday, and with futures pointing toward an opening loss of about 50 points, the Dow could be headed for a retest of support near 10,200, or even 10,000 if selling gains enough momentum. Meanwhile, the S&P 500 Index ( SPX ) is holding above support in the 1,090-1,085 region, though the broad-market index is headed for an 8-point drop on the open, according to pre-market futures trading. The next layer of solid support for the SPX should emerge near 1,065, which is home to its May 2010 lows, while resistance should materialize near 1,100. Finally, the 21-day moving average of the Chicago Board Options Exchange ( CBOE ) equity-only, single-session put/call ratio may have bottomed at a one-month low on Tuesday. The ratio dipped to 0.62, its lowest point since May 19, and appears to be in the process of rebounding from that low. Also of note, volume on equity puts and calls was at its lowest point of the month.

In earnings news, Lennar Corp. ( LEN ) said that it swung to a second-quarter net profit of $39.7 million, or 21 cents per share, even as total revenue dropped 8.7% to $814.5 million. New orders dropped 10% to 3,207 during the quarter, following the expiration of the federal homebuyer tax credit. Analysts were expecting the company to report break even results for the period. Lennar shares are down roughly 1.6% in pre-market trading.

Elsewhere, Bed Bath & Beyond Inc. ( BBBY ) reported first-quarter net income of $137.6 million, or 52 cents per share, with revenue rising 13.5% to $1.92 billion. Same-store sales rose 8.4% from the year-ago quarter. Wall Street was expecting earnings of 48 cents and revenue of $1.89 billion. Ahead of the open, BBBY shares were last seen down 1.4%.

Finally, NIKE Inc. ( NKE ) posted a fourth-quarter profit of $522 million, or $1.06 per share. Sales rose 8% to $5.1 billion. Analysts were looking for earnings of $1.05 per share on sales of $5.13 billion.

Earnings Preview

On the earnings front, Discover Financial Services ( DFS ), H&R Block Inc. ( HRB ), Oracle Corp. ( ORCL ), and Research In Motion Limited ( RIMM ) are scheduled to release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar offers up the usual weekly initial jobless claims today, followed by May's durable goods orders. Finally, we round out the week tomorrow with the initial third-quarter gross domestic product reading and June's final University of Michigan consumer sentiment index.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 825,807 call contracts traded on Wednesday, compared to 582,671 put contracts. The resultant single-session put/call ratio arrived at 0.71, while the 21-day moving average rose to 0.63.

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 is in poor shape this morning, as only two of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a loss of 0.49%. In Asia, leadership changes in Australia sent stocks briefly higher on hopes the proposed mining tax on super profits may be watered down, as Julia Gillard took over the helm as the country's first female prime minister. Meanwhile, trading is Europe is lower, with banks and miners slipping, on investor concerns about the growth outlook after the U.S. Federal Reserve's downbeat economic assessment. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .

Overseas markets

Currencies and Commodities

The U.S. Dollar Index has crept 0.17% higher to 85.89 in pre-market trading, as the greenback benefits from a weakening euro and a safe-haven bid due to economic concerns. The strength in the dollar is limiting gold's appreciation, as the malleable metal is up a mere 90 cents at $1,235.70 in London. Finally, crude futures are headed lower, with the most-active contract slipping 24 cents to $76.11 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

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