Opening View: Lack of Domestic Drivers Could Keep Dow at Breakeven


Futures are up slightly this morning, as investors remain cautious in the wake of last week's selling spree. In fact, the Dow Jones Industrial Average (DJIA ) closed last week below the psychologically significant 12,000 level for the first time in over two months, extending its losing streak to six consecutive weeks. Yet while Dow futures are currently trading 32 points higher, with no major economic reports on the docket, there could be few domestic drivers to nudge the broad-market barometer in either direction today.

Dow, S&P and Nasdaq futures

Quanex Building Products Corporation (NX - 18.10) reported this morning that its second-quarter revenue rose to $203.11 million, up from $199.39 million in the year-ago quarter. Analysts had expected the company to post slimmer revenue of $195.96 million. However, NX also reported a second-quarter loss of 4 cents per share -- nowhere near analysts' estimate for a profit of 11 cents per share.


Chesapeake Energy Corporation (CHK - 29.24) will increase its quarterly dividend by 17% to $0.0875 per share, the company announced this morning. This is a relatively rare move for CHK, which noted that it hasn't increased its dividend since June 2008. The new dividend will be available to CHK shareholders on record as of July 1.

Finally, Wendy's Arby's Group Inc. (WEN - 4.52) announced this morning that it would be selling half of its namesake, Arby's Restaurant Group Inc., to a private buyer formed by Roark Capital Group. Under the terms of the agreement, WEN will maintain an 18.5% interest in Arby's. The deal is valued at $430 million, and is expected to close in the third quarter.

Earnings Preview

Today's earnings docket will feature a report from Pure Bioscience ( PURE ). Keep your browser at for more news as it breaks.

Economic Calendar

There are no economic releases of note on today's agenda. Tuesday will feature May's retail sales results. Also on the docket is May's producer price index (PPI) from the Bureau of Labor Statistics. Rounding out the day will be the government's business inventories report for April, and the National Federation of Independent Business' small-business index for May. As usual, we'll hear the weekly update on domestic petroleum inventories on Wednesday. Also scheduled are May's consumer price index ( CPI ), the Empire State manufacturing index for June, and reports on industrial production and capacity utilization. On Thursday, the Labor Department will release the latest data on weekly jobless claims. Also, we'll hear reports on May's housing starts and building permits, and the Philly Fed index for June. Finally, we'll finish the week with the Reuters/University of Michigan consumer confidence index for June, as well as the Conference Board's leading economic indicators for May.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 858,881 call contracts traded on Friday, compared to 879,794 put contracts. The resultant single-session put/call ratio docked at 1.02, while the 21-day moving average was perched at 0.71.

NYSE and Nasdaq summary

Volatility indices

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Overseas Trading

Stocks in Asia ended mixed today, but a late-day bout of strength in banking stocks helped Hong Kong break its seven-session losing streak. In Japan, a weaker yen weighed on exporters, while a disappointing profit forecast from Toyota Motor ( TM ) pressured sector peers Nissan and Honda. Traders in Tokyo were also spooked by a report showing that core machinery orders dipped 3.3% in April, pointing to a choppy post-quake recovery in manufacturing. Meanwhile, caution reigned in China as traders awaited inflationary data due out Tuesday, which could prompt additional monetary-tightening measures. By the close, Japan's Nikkei fell 0.7%, China's Shanghai Composite lost 0.2%, South Korea's Kospi added 0.1%, and Hong Kong's Hang Seng rose 0.4%.

Markets are modestly higher in Europe at midday, recovering from Friday's steep sell-off. Automaker Peugeot gained ground in France, buoyed by an upgrade to "buy" at Citigroup, while mining stocks rose on reports that Glencore International may be considering a buyout of Eurasian Natural Resources. However, volume is relatively light, due to public holidays across the region. At last check, London's FTSE 100 is down 1.6%, France's CAC 40 is 0.3% higher, and Germany's DAX has added 0.2%.

Overseas markets

Currencies and Commodities

Crude futures have backpedaled this morning, more than erasing last week's OPEC-inspired gains. Black gold's descent began on Friday, after news broke that Saudi Arabia could diverge from the rest of OPEC by boosting its production output. Ahead of the open, crude futures were trading 1.34 points, or 1.35%, lower, at $97.95 a barrel. Meanwhile, gold futures are also starting the week on a negative note, trading 3.1 points, or 0.2%, lower, as a stronger dollar has lessened demand for the safe-haven asset. However, the greenback is also suffering from a "case of the Mondays," with the U.S. dollar index currently down 0.08 point, or 0.1%.

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.

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This article appears in: Investing , Options

Referenced Stocks: CBOE , CPI , PURE , TM , TRV

Schaeffer's Investment Research

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