Opening View: Futures Mixed as Investors Look Overseas; Japan's Nikkei Bounces Back


Shutterstock photo

The Dow Jones Industrial Average (DJIA) finished Tuesday with a triple-digit deficit, but came off its session lows after the Federal Open Market Committee (FOMC) vowed to maintain rock-bottom interest rates. In the same vein, the S&P 500 Index (SPX) and Nasdaq Composite (COMP) gave up 1.1% and 1.3%, respectively, as stocks slid in parity with overseas markets. What's more, the CBOE Market Volatility Index (VIX) - also known as the market's "fear gauge" - hit record options volume on Tuesday, topping the one-million-contract benchmark for the first time ever. Ahead of the bell, however, futures are mixed, as investors continue to keep an eye on Japan and the Middle East, where fighting in Bahrain has intensified.

At last check, the Dow was trading more than 50 points above fair value - likely taking a cue from Japan's Nikkei index, which bounced back after its worst performance in 24 years. On the other hand, the SPX was last 3.5 points lower.

In equities news, Pacific Sunwear ( PSUN ) reported an adjusted fourth-quarter loss of 33 cents per share, while revenue for the quarter fell 10% to $263 million. The results fell short of Wall Street's expectations, which called for a loss of 32 cents per share on sales of $271 million. The apparel company also predicted a first-quarter loss of 29 cents to 35 cents per share, compared to analysts' expectations for a loss of 22 cents per share.

Elsewhere, Vera Bradley ( VRA ) announced last night that its fiscal fourth-quarter earnings declined 18% to $14.2 million, or 35 cents per share. On an adjusted basis, VRA earned 39 cents per share, while revenue rose 29% to $109.4 million. Analysts, on average, were looking for a profit of 27 cents per share on $96 million in revenue.

Finally, according to media reports, Morton's Restaurant Group ( MRT ) is considering putting itself up for sale, in an effort to enhance shareholder value. The Chicago firm's two largest shareholders, Laurel Crown Partners LLC and Castle Harlan Inc., apparently support the decision. The shares of MRT settled at $6.44 on Tuesday, but are poised to skyrocket right out of the gate.

Earnings Preview

On the earnings front, General Maritime Corp. ( GMR ), Guess Inc. ( GES ), and Medivation Inc. (MDVN) are slated to release their quarterly earnings reports. Keep your browser at for more news as it breaks.

Economic Calendar

The Street will get word on February's housing starts and building permits today, as well as the latest producer price data and regularly scheduled crude inventories report. Finally, the economic calendar will wind down tomorrow with the government's weekly jobless claims and the Conference Board's index of leading indicators, as well as the latest data on consumer prices, industrial production, and manufacturing activity in the Philadelphia region.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,490,495 call contracts traded on Tuesday, compared to 1,073,923 put contracts. The resultant single-session put/call ratio jumped to 0.72, while the 21-day moving average edged higher to 0.61.

Volatility indices

NYSE and Nasdaq summary

Dow, S&P and Nasdaq futures

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

Overseas Trading

Asian markets enjoyed a much-needed bounce today, with Japan's Nikkei surging 5.7% on the heels of its worst two-day performance since 1987. Investor sentiment in the region remains shaky, given the ongoing crisis at the crippled Fukushima Daiichi nuclear plant, but other indexes also notched respectable gains. The Shanghai Composite added 1.2%, South Korea's Kospi gained 1.8%, and Hong Kong's Hang Seng eked out a 0.1% rise.

On the other hand, European stocks are sitting on modest declines at midday. Traders took their cues from a downgrade of Portugal's debt, with Moody's slashing its rating by two degrees to "A3." At last check, Spain's IBEX 35 was off 1.2%, the French CAC 40 shed 0.8%, London's FTSE 100 was down 0.7%, and the German DAX was fractionally higher.

Overseas markets

Currencies and Commodities

The U.S. dollar is poised to extend its gains this morning, as the U.S. Dollar Index was seen up about 0.3% at 76.55. Elsewhere, crude futures are also headed higher, after exploring four-week-low territory on Tuesday. In electronic trading, the April crude futures contract has added 1.5% to $99.43 per barrel. Finally, gold futures have also bounced back, advancing 0.5% to hover just shy of the $1,400 neighborhood.

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 Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing Options
Referenced Stocks: GES , GMR , MRT , PSUN , VRA

More from Schaeffer's Investment Research


Schaeffer's Investment Research

Schaeffer's Investment Research

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by