Opening View: U.S. Stock Futures Poised to Extend Gains

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The Dow Jones Industrial Average (DJIA) battled higher on Friday, closing the week on a positive note despite a mixed January jobs report. That positive bias appears to have held over the weekend, as futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 27.8 points and 2.7 points above fair value, respectively. Monday merger and acquisition activity and another round of corporate earnings are driving investor sentiment heading into the open, pushing the DJIA and the SPX further above key round-number levels.

Technically, the DJIA is poised to topple the 12,100 level this morning, following last week's breakout above the 12,000 mark. From a short-term perspective, the Dow could find some turbulence in the 12,100-12,150 region, while 12,200 could be the next potential ceiling. As for the SPX, the broad-market index is set to open above the 1,310 level, which should now provide short-term support. Resistance, meanwhile, lies in the 1,320-1,325 region.

In earnings news, Hasbro Inc. ( HAS ) reported fourth-quarter net income of $140 million, or 99 cents per share, as revenue fell to $1.28 billion. Analysts were expecting earnings of 96 cents per share. Brian Goldner, Hasbro's president and chief executive, noted that 2011 "will be the first full year in which we have significant initiatives across all the elements of our multiyear branded-play strategy."

Elsewhere, Chesapeake Energy Corp. ( CHK ) announced that it is selling its Fayetteville shale assets, and its equity stakes in Frac Tech Holdings LLC and Chaparral Energy Inc. for an anticipated $5 billion. The move is part of the company's plan to cut long-term debt by 25% in 2011 to 2012.

Finally, AOL Inc. ( AOL ) said that is has agreed to acquire The Huffington Post for $315 million. The deal, which has been approved by the both boards, is said to be an attempt to create a content group "for the digital age -- leveraged across online, mobile, tablet and video platforms," the two companies said in a statement. As part of the deal, Co-founder and Editor-in-chief Arianna Huffington will be named President and Editor-in-chief of The Huffington Post Media Group, which will integrate all Huffington Post and AOL content.

Earnings Preview

On the earnings front, Humana Inc. ( HUM ), Loews Corp. ( L ), Lorillard Inc. (LO), Sysco Corp. (SYY), FMC Corp. (FMC) and Gartner Inc. (IT) are slated to release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

There are no major economic reports scheduled today or tomorrow. On Wednesday, the usual weekly report on crude inventories will arrive, while weekly initial jobless claims will arrive on Thursday. Finally, the December trade deficit will be joined by the University of Michigan's initial consumer sentiment index for February.

Market Statistics

Equity option activity on the CBOE saw 1,381,843 call contracts traded on Friday, compared to 888,221 put contracts. The resultant single-session put/call ratio arrived at 0.64, while the 21-day moving average rose to 0.54.

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

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

Overseas Trading

Overseas trading is mostly higher this morning, with seven of the 10 foreign indexes that we track in positive territory. The cumulative average return on the collective stands at a gain of 0.19%. Asian markets are trading mostly higher, with Japan's Nikkei leading the way as exporters rally on a weaker yen. Hong Kong's Hang Seng plunged nearly 1.5% after the index resumed trading following a holiday break. Speaking of which, markets in China, Taiwan, and Vietnam remained closed due to last week's Lunar New Year holiday. Across the pond in Europe, banks are leading the way higher, setting a positive tone early in the trading session.

Overseas markets

Currencies and Commodities

The U.S. dollar continues to benefit from a safe-haven bid this morning, with currency traders favoring the greenback over the Japanese yen. What's more, the Egyptian pound has plunged to a six-year low versus the dollar. Heading into the open, the U.S. Dollar Index has added 0.22% to trade at 78.22. Meanwhile, crude futures are bouncing back from last week's losses, with the March contract up 22 cents at $89.25 per barrel. Finally, gold futures are hovering just below breakeven in London, with the malleable metal off $1.80 at $1,347.20 an ounce.

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: AOL , CHK , HAS , HUM , L

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