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Opening View: DJIA Extends Losses on Weak Japanese GDP

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The Dow Jones Industrial Average (DJIA) plunged more than 3% last week, as traders lost confidence in the strength of the global economic recovery. The Dow held support near 10,300 for the week, but that support level will be tested once again this morning, as futures on the DJIA are pointing toward an opening loss of about 30 points. Elsewhere, S&P 500 Index (SPX) futures are trading roughly 4.5 points below fair value, placing the broad-market index on a collision course with last week's low near 1,076. The focus in early Wall Street action is the weaker-than-expected report on Japanese gross domestic product and today's release of the New York Fed's Empire State manufacturing index. Finally, VIX watchers should note that the CBOE Market Volatility Index (VIX) closed above its 10-week moving average for the first time since June 11 on Friday. Last week's heavy losses on Wall Street drove volatility higher once again, but the VIX still remains capped by resistance in the 27 area, above which the index has not closed a session since July 6.

In equity news, Dell Inc. ( DELL ) announced that it is buying 3Par Inc. ( PAR ) for $18 per share. The offer values PAR at an 86% premium to the stock's close at $9.65 per share on Friday. Dell said the acquisition would add to its earnings starting in 2012.

Elsewhere, Lowe's Companies Inc. ( LOW ) reported second-quarter earnings of $832 million, or 58 cents per share, as sales grew to $14.4 billion. Analysts were expecting a profit of 59 cents per share. Looking ahead, the company sees third-quarter earnings of 28 cents to 32 cents per share, with fiscal 2010 earnings coming in the range of $1.38 to $1.45 per share.

Earnings Preview

On the earnings front, Agilent Technologies Inc. ( A ), Sysco Corp. ( SYY ), and Urban Outfitters Inc. ( URBN ) are scheduled to release their quarterly earnings report today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The New York Fed will release its Empire State Manufacturing Survey for August today, but traders will have a lot of economic data to consider on Tuesday. The Commerce Department will release reports on housing starts and building permits for July, while the Labor Department will supply July readings on the Producer Price Index (PPI) and the core PPI. Meanwhile, the Federal Reserve will report on industrial production in July. The usual weekly report on U.S. petroleum supplies is due on Wednesday. The weekly report on initial jobless claims will be released on Thursday, along with the Conference Board's Leading Indicators Index for July, and the Philadelphia Fed Index for August. There are no major economic reports scheduled for Friday.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 775,613 call contracts traded on Friday, compared to 518,793 put contracts. The resultant single-session put/call ratio arrived at 0.67, while the 21-day moving average held at 0.61.

**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.**

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.

Overseas Trading

Overseas trading remains weak this morning, as only three of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a loss of 0.06%. Weaker-than-expected gross domestic product ( GDP ) out of Japan set a bearish tone in early Asian trading, but Chinese stocks bucked the overall downtrend to finish more than 2% higher. According to economists, Japan's weak GDP hints that the country could be overtaken by China as the world's second-largest economy. In Europe, stocks took their cues from Asia, heading lower in early trading activity.

Currencies and Commodities

The U.S. Dollar Index is pulling back from resistance near the 83 level in Asian trading, as the euro and the yen rebounded from near-term lows. Currently, the index is hovering above support in the 82.50 region, after falling 0.51% to 82.53. In commodities, gold continues to benefit from safe-haven buying, with the precious metal gaining $7.90 to trade at $1,224.50 in London. Finally, crude prices have rebounded from support, and are up 34 cents at $76.11 per barrel.

Unusual Put and Call Activity:

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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