Opening View: The Battle for 10,000; DJIA Futures Higher Before Fed and GDP

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The Dow Jones Industrial Average (DJIA) closed below the 10,000 level yesterday for the first time since July 6, as a late-session sell-off finally overwhelmed the blue-chip barometer. However, with second-quarter gross domestic product ( GDP ) and a speech from Federal Reserve Chairman Ben Bernanke on tap later today, the situation could change rather quickly. In fact, optimism appears to be creeping onto Wall Street, as futures on the DJIA and the S&P 500 Index (SPX) are trading 25 points and 3 points above fair value, respectively. For support, watch the 9,950 and 9,800 levels for the Dow, and the 1,040 and 1,035 areas for the SPX. On the upside, 10,100 could be a major sticking point for the DJIA, while 1,060 remains a short-term ceiling for the SPX. Finally, keep a close eye on the 28-29 region for the CBOE Market Volatility Index (VIX), as a breakout above this region could mean a continued march higher for market volatility.

In equity news, Dell Inc. ( DELL ) fired another volley in the bidding war for 3PAR Inc. (PAR), lifting its bid for a second time in response to a competing bid from rival Hewlett-Packard Co. ( HPQ ). Dell's current offer stands at $27 per share in cash for the data storage company, valuing the firm at $1.8 billion. Late last night, HPQ raised its offer to $27 per share from $24 per share, after Dell lifted its initial offer to $24.30 per share from $18 per share. In a separate release, 3PAR accepted Dell's buyout offer of $27 per share. The deal is expected to close before the end of the year.

Elsewhere, Tiffany & Co. ( TIF ) posted a second-quarter profit of $67.7 million, or 53 cents per share, as sales in the Americas rose 8% to $668.8 million. Wall Street was expecting earnings of 53 cents per share on sales of $691.7 million. Looking ahead, Tiffany expects fiscal 2010 earnings from continuing operations of $2.60 to $2.65 per share, ahead of analysts' expectations for earnings of $2.59 per share.

Finally, Novell Inc. ( NOVL ) reported that its fiscal third-quarter net income fell to $15.7 million, or 4 cents per share, as revenue dropped to $199 million. Excluding special items, Novell said earnings for the period were 6 cents per share. Analysts had expected the company to post earnings excluding items of 7 cents per share on $201.2 million in revenue.

Earnings Preview

On the earnings front, Frontline Ltd. ( FRO ) is scheduled to release its quarterly earnings report today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

We round out the week today with a second look at second-quarter U.S. gross domestic product and the final reading on the University of Michigan's August consumer sentiment index.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 814,966 call contracts traded on Thursday, compared to 546,917 put contracts. The resultant single-session put/call ratio arrived at 0.67, while the 21-day moving average held at 0.64.

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 has a positive bias this morning, 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 0.10%. In Asia, regional markets advanced despite sentiment pressures following the Dow's close below 10,000 on Wall Street. However, Japanese shares recovered following reports the prime minister may finally directly address the yen's recent surge versus the U.S. dollar. Trading in Europe, meanwhile, is mixed as regional indexes attempt to extend Thursday's tentative rebound.

Overseas markets

Currencies and Commodities

Equities may be headed higher, but currencies and commodities are trading close to breakeven ahead of this morning's economic data. First up, the U.S. Dollar Index is fractionally lower in pre-market trading, slipping 0.02% to 82.92 at last check. Meanwhile, crude futures have a positive bias, with the lead contract up 20 cents at $73.56 per barrel. Finally, gold futures are up $1.90 at $1,239.60 an ounce in London. Don't expect much from this trio until second-quarter GDP and Ben Bernanke have their say.

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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