Opening View: Futures Falter Ahead of Fed Minutes; TXN, NSM, and AAPL in Focus

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U.S. equities are poised to follow their overseas counterparts into the red this morning, with radiation woes, rate hikes, and sovereign debt concerns overshadowing optimism about Texas Instruments' (TXN - 34.11) purchase of National Semiconductor (NSM - 14.07). In Asia, stocks fell on news of radioactive dumping in the Pacific Ocean, while European markets are retreating in the wake of a debt downgrade for Portugal. Meanwhile, central banks have also taken the spotlight today, with both China and Australia making decisions on their key lending rates, and the Federal Open Market Committee's (FOMC) latest meeting minutes slated for release later this afternoon. Against this backdrop, the Dow Jones Industrial Average (DJIA ) has surrendered about 27 points, at last check, while the S&P 500 Index (SPX ) is flirting with a loss of about 3.4 points.

Dow, S&P and Nasdaq futures

In equities news, Texas Instruments ( TXN ) last night said it will buy National Semiconductor ( NSM ) for about $6.5 billion in cash, or $25 a share, representing a premium of nearly 80% to NSM's closing price of $14.07 on Monday. The deal -- which has already received a unanimous thumbs-up by both boards -- is expected to close within the next six to nine months, the companies said. At last check, the shares of TXN are down 2.5%, while the shares of NSM have skyrocketed more than 70% ahead of the bell.

Meanwhile, exchange operator Nasdaq OMX Group (NDAQ - 27.44) said it will rebalance its benchmark Nasdaq 100 Index on May 2. As a result, tech titan Apple Inc. (AAPL - 341.19) will remain the largest component of the index, but its projected weight will be reduced to 12.33%, compared to its current weight of 20.49%. "Nasdaq decided to enact a special rebalance in order to bring the weights of the index securities closer in line with their actual market capitalizations," the exchange said. The news has evidently overshadowed Consumer Reports naming Apple's iPad 2 its top tablet pick, with the shares of AAPL down 1.6% ahead of the bell.

On the earnings front, Schnitzer Steel (SCHN - 66.01) reported a fiscal second-quarter profit of $30.8 million, or $1.10 per share -- up 77% from its year-ago results. Revenue for the quarter rose 28% to $721.8 million, while gross margin expanded to 12.3% from 12.2%. Analysts, on average, were looking for a profit of just 85 cents per share, but consensus estimates called for healthier revenue of $747 million. In pre-market action, the shares of SCHN have added about 1.5%.

Earnings Preview

Today we'll hear earnings reports from International Speedway ( ISCA ), KB Home ( KBH ), Layne Christensen ( LAYN ), AngioDynamics (ANGO), and Mitcham Industries (MIND). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar heats up today with the Institute for Supply Management's (ISM) non-manufacturing index for March, as well as the Federal Open Market Committee's (FOMC) most recent meeting minutes. On Wednesday, we'll see the weekly crude inventories report, plus the Mortgage Bankers Association's (MBA) mortgage applications index. Thursday will bring us the 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 1,041,914 call contracts traded on Monday, compared to 626,230 put contracts. The resultant single-session put/call ratio jumped to 0.60, while the 21-day moving average was flat at 0.62.

NYSE and Nasdaq summary

Volatility indices

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

Overseas Trading

Japanese stocks blazed a path lower today, with automakers pacing the retreat. Leading the laggards was Toyota Motor (TM), after the Associated Press reported that the company will temporarily shutter its North American plants due to a supply shortage. Meanwhile, Tokyo Electric Power began dumping toxic water into the Pacific Ocean -- a move Japan's Chief Cabinet Secretary Yukio Edano said was "unavoidable." By the close, the Nikkei gave up 1.06%. Meanwhile, despite the market being closed for holiday, China's central bank unexpectedly hiked its key lending rate.

European markets were also lower, after Moody's cut Portugal's sovereign debt rating by one notch. The ratings firm said the country's new government needs to seek urgent financing from the European Union, and said further downgrades are dependent upon Lisbon's ability to secure funding for the intermediate term. At last check, France's CAC 40 was down 0.5%, London's FTSE 100 has given up 0.3%, and Germany's DAX has surrendered almost 0.4%.

Overseas markets

Currencies and Commodities

The U.S. dollar is trending higher this morning, as the U.S. Dollar Index was seen hovering around 76.05. Elsewhere, crude futures have backpedaled from 30-month highs; in electronic trading, the May crude futures contract has given back almost 0.6% to linger back beneath $108 per barrel. Finally, gold futures are also fractionally lower, surrendering 0.03% to flirt with $1,432.60 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: ISCA , KBH , LAYN , NSM , TXN

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