Opening View: DJIA Tries to Extend Winning Streak

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The Dow Jones Industrial Average (DJIA) extended its winning streak to four in a row on Wednesday, as Wall Street cheered a round of stronger-than-expected quarterly earnings reports. Expectations for quantitative easing from the Federal Reserve also played a fairly large role in the advance. Heading into the open this morning, futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 23 points and 3 points above fair value, respectively. Traders appear positive ahead of this morning's reports on jobless claims and September's producer price index (PPI), and the DJIA looks poised to do battle with the 11,150 level once again today. Support for the Dow continues to solidify at the 11,000 level, while a firmer floor resides at the 10,900 level. As for the SPX, support lies at 1,170, with resistance manifesting at 1,185.

In equity news, AOL Inc. ( AOL ) is discussing a possible buyout offer for Yahoo Inc. ( YHOO ), according to The Wall Street Journal . AOL is in talks with firms including Silver Lake Partners and Blackstone Group LP ( BX ) about a possible offer. AOL is also mulling a reverse merger with Yahoo, with the resulting entity possibly becoming a private company, according to the report.

Elsewhere, Wal-Mart Stores Inc. ( WMT ) lowered the high end of its capital spending forecast for fiscal 2011 by $1 billion. The retailer now expects capital spending for the fiscal year to range from $13 billion to $14 billion, while fiscal 2012 capital spending is projected at $13.5 billion to $14.5 billion. "Overall sales growth is forecasted between 4% and 6%. In the United States, we will shift more capital toward new stores, including supercenters and smaller formats," said Charles Holley, executive vice president.

Also, Apollo Group Inc. ( APOL ) announced that its fourth-quarter profit declined to $41 million, or 28 cents per share. Excluding one-time items, the company would have reported earnings from continuing operations of $1.31 per share, as revenue rose to $1.26 billion. Analysts were looking for a quarterly profit of $1.30 per share on revenue of $1.26 billion. Additionally, Apollo Group withdrew its business outlook for 2011, citing increased regulatory uncertainty in its industry.

Earnings Preview

On the earnings front, Safeway Inc. (SWY), Advanced Micro Devices Inc. (AMD), Google Inc. (GOOG), J.B. Hunt Transport Service Inc. (JBHT), and The Progressive Corp. (PGR) will release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Weekly initial jobless claims arrive today, along with the September producer price index and the August trade balance. Tomorrow will be busy once again, with the September consumer price index, retail sales, the New York Fed's Empire State manufacturing index, and the University of Michigan's consumer sentiment index for October.

Market Statistics

Equity option activity on the CBOE saw 1,953,116 call contracts traded on Wednesday, compared to 876,146 put contracts. The resultant single-session put/call ratio arrived at 0.45, while the 21-day moving average slipped to 0.58.

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 largely positive, as seven of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.55%. In Asia, regional markets rallied following the surprise policy tightening by Singapore. Shares in Hong Kong, India, Thailand, and Indonesia all hit 52-week highs, while gold finished at a record high in the region. Meanwhile, European markets are mixed in early trading activity, as traders turned hopeful that the U.S. Federal Reserve would institute another round of quantitative easing.

Overseas markets

Currencies and Commodities

The U.S. dollar is under fire this week, and this morning brings with it a convergence that has the U.S. Dollar Index trading at its 2010 lows. First, Singapore's central bank unexpectedly widened the trading range for the Singapore dollar, effectively tightening monetary policy. Meanwhile, the euro has tagged a nine-month high versus the greenback, while the dollar has plunged to a 15-year low against the Japanese yen. At last check, the U.S. Dollar Index was off 0.69% at 76.54. Commodities are continuing to take advantage of the greenback's weakness, with gold futures jumping $12.10 to $1,382.60 an ounce in London, while crude futures have added 36 cents to $84.10 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: AOL , APOL , BX , WMT , YHOO

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