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Opening View: DJIA Futures Flat Ahead of Obama Budget Details

By: Schaeffer's Investment Research
Posted: 2/14/2011 8:02:00 AM
Referenced Stocks: DYN;GE;HUGH;IEP;SATS

GE

Technically speaking, the DJIA enters this week trading just below potential round-number resistance at the 12,300 level, which the Dow hasn't closed a session above since June 13, 2008. Support, meanwhile, could materialize in the 12,150-12,200 region. As for the SPX, traders should keep a close eye on 1,333.58, as this marks a double of the index's March 2009 low. As Todd Salamone, Senior Vice President of Research, noted in this weekend's edition of Monday Morning Outlook , "For short-term traders, 1,333.58 is worth noting as a potential resistance or hesitation area."

In merger and acquisition news, General Electric Co. ( GE ) announced that it has agreed to purchase the well support division of John Wood Group PLC for approximately $2.8 billion in cash. GE expects the deal to close this year. The Wood Group division employs roughly 3,800 people worldwide.

Also in acquisitions, EchoStar Corp. ( SATS ) is buying Hughes Communications Inc. ( HUGH ) for about $2 billion, including the assumption of debt. According to the terms of the deal, Hughes shareholders will receive $60.70 per share. EchoStar expects the acquisition to close later this year.

Finally, Carl Icahn's Icahn Enterprises LP ( IEP ) extended its buyout offer for Dynegy Inc. ( DYN ) to Friday. The offer stands at $5.50 per share, or $665 million. Icahn already owns 15% of Dynegy's shares, and acquiring another 35% would solidify the deal. "No price increase or further extensions will be made," Icahn said.

Earnings Preview

On the earnings front, Agilent Technologies (A), Marriott International (MAR), and MGM Resorts International (MGM) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

There are no economic reports slated for release today, while the latest ICSC-Goldman Sachs chain store sales report and the Empire State manufacturing survey are slated to hit the Street tomorrow. Wednesday brings us the latest word on January's new housing starts, the January producer price index (PPI), weekly U.S. petroleum supplies, and the minutes from the most recent Federal Open Market Committee (FOMC) meeting. Inflationary data continues to roll in Thursday, with the release of January's consumer price index (CPI). Also on Thursday's docket are weekly jobless claims, leading economic indicators, and the Philadelphia Fed business outlook survey. The economic calendar is bare on Friday.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,644,043 call contracts traded on Friday, compared to 893,619 put contracts. The resultant single-session put/call ratio arrived at 0.54, while the 21-day moving average held at 0.55.

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 looks strong 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 0.97%. Asian markets headed sharply higher on Monday, with stocks enjoying a relief rally in the wake of news that Egyptian President Hosni Mubarak had resigned. China's Shanghai spiked more than 2.5%, after economists speculated that this week's inflation data may stay Beijing's hand, for now, on further tightening monetary policy. European markets are mixed, however, with Asia's enthusiasm failing to fully take hold.

Overseas markets

Currencies and Commodities

The U.S. dollar is gaining ground against the euro this morning, as currency traders position themselves ahead a meeting of European finance ministers to discuss a response to the region's sovereign debt crisis. Against this backdrop, the U.S. Dollar Index has gained 0.38% to 78.76 in premarket trading. The greenback's gains have taken their toll on commodities, with March crude up a mere dime at $89.23 per barrel, while gold futures have slipped $1.40 to $1,359 an ounce in London.

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.