Opening View: U.S. Stocks Follow Europe Lower Ahead of Key Slovakia Vote, FOMC Minutes


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After starting the week with a 330-point gain , the Dow Jones Industrial Average (DJIA) is trading modestly lower this morning, thanks to anxiety ahead of a key parliamentary vote in Slovakia. Specifically, the nation is set to weigh in on proposed amendments to the euro zone's rescue fund, and investors are betting on the country's Freedom and Solidarity party to leave the government short of the necessary number of votes for approval. On the home front, meanwhile, traders are also anxious ahead of the Federal Open Market Committee's (FOMC) latest meeting minutes, slated for release this afternoon, as well as Alcoa's ( AA ) unofficial start to third-quarter earnings season after the closing bell. Against this cautious backdrop, the DJIA is bracing for a 30-point drop, while the broader S&P 500 Index (SPX) is trading nearly 5 points south of breakeven.

Dow, S&P and Nasdaq futures

In earnings news, Mistras Group (MG - 19.46) said its fiscal first-quarter profit soared 103% to $3.2 million, or 11 cents per share, from $1.6 million, or 6 cents per share, in the year-ago period. Revenue, meanwhile, increased 34% to $91.4 million. On average, analysts were expecting MG to report a profit of 10 cents per share on sales of $81.1 million. Looking ahead, the company backed its fiscal 2012 forecast for revenue of $375 million to 390 million, compared to Wall Street's projections of $389 million. In pre-market trading, MG is headed for a 3.6% gain.

In equities news, Automatic Data Processing (ADP - 49.97) confirmed that is has now acquired The RightThing, a privately owned recruitment process outsourcer (RPO). As a global leader in outsourcing solutions, ADP sees this move as a cost-effective means of providing an efficient product to their customers. Regina Lee -- President of National Account Services, Major Account Services, GlobalView, and ADP Canada business units -- explains, "Expansion into complementary markets -- such as RPO -- will be of great benefit to our clients and is a critical element in our plan to grow our business."

Finally, General Mills (GIS - 39.31) this morning scored an upgrade to "conviction buy" from "neutral" at Goldman Sachs. From a broader sentiment standpoint, there's still plenty of room for more bulls on the bandwagon. According to Zacks, seven out of 16 analysts maintain "hold" or worse opinions of GIS, which has outperformed the SPX by nearly 17% during the past 60 sessions. Ahead of the bell, GIS is pointed 0.6% higher.

Earnings Preview

Today's earnings docket will feature reports from Alcoa ( AA ), Joe's Jeans ( JOEZ ), Synergetics USA ( SURG ), and EXFO Inc. ( EXFO ). Keep your browser at for more news as it breaks.

Economic Calendar

The central bank will take the spotlight today, with the release of the FOMC's latest meeting minutes on tap. The economic agenda is relatively light on Wednesday, with the MBA mortgage index slated for release. Meanwhile, Thursday heats up with the August trade balance, the holiday-delayed crude inventories report, and the weekly report on initial jobless claims. Friday winds down with September retail sales data, the Reuters/UMich consumer sentiment index, business inventories, and import/export prices.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 829,353 call contracts traded on Monday, compared to 519,073 put contracts. The resultant single-session put/call ratio arrived at 0.63, while the 21-day moving average was 0.72.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Asian markets ended broadly higher today, with traders taking their cues from Wall Street's big Monday rally. Banking stocks paced the advancing issues in China, after the country's sovereign wealth fund disclosed sizable share purchases in both Industrial & Commercial Bank of China and Agricultural Bank of China. Meanwhile, Seoul-listed retailers were boosted by relatively tame inflation data, which could enable Bank of Korea policymakers to stand pat on rates when they meet later this week. By the close, Hong Kong's Hang Seng added 2.4%, Japan's Nikkei rose roughly 2%, South Korea's Kospi climbed 1.6%, and China's Shanghai Composite tacked on 0.2%.

On the other hand, benchmark European indexes are wallowing south of breakeven at midday. Anxiety is running high as Slovakia prepares to vote on the proposed expansion of the European Financial Stability Facility (EFSF), as the country is the last euro-zone member to weigh in on the matter. Additionally, next week's planned meeting of European Union leaders has been postponed until Oct. 23, with President Herman Van Rompuy citing the need for more time "to finalize our comprehensive strategy on the euro area sovereign debt crisis." Against this uneasy backdrop, London's FTSE 100 is down 0.7%, the French CAC 40 is off 0.5%, and the German DAX has shed 0.7%.

Overseas markets

Currencies and Commodities

The greenback is trading modestly higher this morning, with the U.S. dollar index up 0.4% at last look. Elsewhere, crude futures have pulled back, with the front-month contract down 63 cents, or 0.7%, to hover just south of $85 per barrel. Likewise, gold futures are also in the red, with the malleable metal last seen $6.40, or 0.4%, lower at $1,664.40 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

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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
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