Opening View: Futures Point to a Promising Start to Holiday-Shortened Week

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The holiday-shortened week looks to be off to a promising start, as futures on all three major indexes are pointing higher. Traders today are likely wondering whether the markets can continue Friday's positive momentum, as the Dow is still flying high from its best close since March 2009. However, with today's economic and earnings calendars looking light, stocks could be left hanging in the balance. Ahead of the open, futures on the Dow Jones Industrial Average (DJIA ) are trading about 16 points above fair value.

Dow, S&P and Nasdaq futures

Energy Transfer Equity, LP's (ETE - 44.68) buyout offer for Southern Union Company (SUG - 40.37) has been unanimously accepted by SUG's board. The offer gives Southern Union stockholders the option of exchanging each of their common shares for $40 in cash or 0.903 of a common unit of ETE, with a collar on the cash component set at 60% of the aggregate consideration. Last month, Williams Company's $39-per-share offer for SUG was rejected by its board. Ahead of the open, SUG has added over 4%.

Microsoft Corporation (MSFT - 26.02) and Baidu, Inc. (BIDU - 143.35) have teamed up to expand their presence in the global marketplace, according to a Wall Street Journal report out this morning. More specifically, BIDU has entered into an agreement with MSFT to source results for its English-language searches through the tech company's Bing program.

Dow component Pfizer Inc. (PFE - 20.75) is attempting to shrug off a report published in a Canadian medical journal on Monday. The report linked PFE's smoking cessation drug Chantix to a heightened risk of a heart attack. PFE said in a response Monday that it "stands behind the benefit/risk profile of Chantix," citing more than 14 clinical trials. The pharmaceutical stock is 0.4% lower ahead of the open.

Earnings Preview

Today's earnings docket will feature a report from Gravity Co. ( GRVY ). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar kicks off today with factory orders for May. On Wednesday, the ISM services index for June is due out, along with the regularly scheduled weekly report on mortgage applications from the Mortgage Bankers Association ( MBA ). Employment data takes the spotlight on Thursday, with the day's docket featuring ADP's private-sector payrolls report for June, as well as the Labor Department's usual update on weekly jobless claims. Crude inventories will also hit the Street one day later than usual, due to the July 4 holiday. Ahead of Friday's opening bell, all eyes will be on the Labor Department's nonfarm payrolls report for June. Later in the session, traders will also hear about May's wholesale inventories.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,014,193 call contracts traded on Friday, compared to 567,679 put contracts. The resultant single-session put/call ratio docked at 0.56, while the 21-day moving average was perched at 0.74.

NYSE and Nasdaq summary

Volatility indices

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Overseas Trading

Asian markets ended mixed today. Financial stocks were a pocket of weakness in China and Hong Kong, after Moody's warned that the sector may have greater-than-anticipated exposure to local government debt. Plus, anxiety was further exacerbated by media reports indicating that the central bank may be on the verge of another rate hike. Elsewhere, Korean equities collected their fifth straight day of gains, led by rumored takeover target Hynix Semiconductor. Likewise, speculation about a potential tie-up between Tokyo Stock Exchange and Osaka Securities Exchange helped fuel Japanese stocks to their sixth winning session in a row. By the close, Hong Kong's Hang Seng declined 0.1%, Japan's Nikkei edged 0.07% higher, China's Shanghai Composite added 0.1%, and South Korea's Kospi climbed 0.8%.

European indexes are also planted on both sides of the breakeven line at midday. The Markit composite purchasing managers index ( PMI ) for the euro zone came in weaker than expected, but traders have generally taken the news in stride. Tullow Oil is a standout in London after predicting record revenues during the first half of 2011, while Carrefour is enduring some volatile trading in Paris after spinning off its Dia discount retail unit. At last check, the French CAC 40 is down 0.4%, while London's FTSE 100 is 0.1% higher, and the German DAX has added 0.2%.

Overseas markets

Currencies and Commodities

The dollar has gained ground against its peers this morning, adding 0.2 point, or 0.2%, ahead of the open. The greenback has continued to advance as a result of economic uncertainties plaguing the euro zone. Meanwhile, gold futures have also risen this morning, muscling above the psychologically significant $1,500 level. At last check, gold futures were up 21.3 points, or 1.4%. Finally, even black gold is trading higher in pre-market activity, up 0.4 point, or 0.4%, at last check.

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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This article appears in: Investing , Options

Referenced Stocks: CBOE , GRVY , MBA , MSFT , PMI

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