Opening View: Stocks Head Cautiously Higher; North Korea, Europe in the Spotlight

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U.S. stocks are cautiously higher ahead of the bell, as Wall Street digests the death of North Korean leader Kim Jong-il, who reportedly suffered a fatal heart attack over the weekend. In September, the dictator named the youngest of his three sons, Kim Jong-un, his successor. Elsewhere, while a handful of buyers remain spooked by Fitch's late-week warning on euro-zone debt ratings, more than a few bargain hunters have emerged in the wake of last week's sell-off . Against this backdrop, the Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) are flirting with modest gains ahead of the bell.

On the earnings front, Jakks Pacific (JAKK - 17.35) lowered its 2011 earnings outlook, citing "a difficult retail sales environment for toys, especially during the important holiday season." Now, the firm expects 2011 adjusted earnings of 37 cents to 40 cents per share on sales of about $660 million. Previously, JAKK forecast an adjusted full-year profit of $1.32 to $1.35 per share on sales of roughly $770 million to $775 million.

In equities news, Wasau Paper (WPP - 8.07) agreed to sell its remaining Timberland holdings via a duo of transactions. Specifically, the firm said it will sell the 80,000-plus acres in northern Wisconsin to Lyme Timber Co. and Forestland Group, in a pair of deals valued at $42.9 million. Both transactions are slated for completion before the end of the calendar year.

Earnings Preview

Today's earnings docket will feature reports from Red Hat ( RHT ), Oxygen Biotherapeutics ( OXBT ), and Shiloh Industries ( SHLO ). Keep your browser at for more news as it breaks.

Economic Calendar

The economic calendar is relatively light today, with only the NAHB's monthly housing stats on tap. On Tuesday, the housing trend continues with the government's latest figures on housing starts and building permits slated for release. It's essentially more of the same on Wednesday, when November's existing home sales data, along with the regularly scheduled crude inventories report, hits the Street. On Thursday, the economic calendar heats up with the release of the weekly jobless figures, the Thomson Reuters/University of Michigan consumer sentiment index, the Conference Board's index of leading economic indicators, and the government's latest estimate on third-quarter gross domestic product ( GDP ). Finally, we head into the long holiday weekend with data on durable goods, personal income and spending, and new home sales for November.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 953,636 call contracts traded on Friday, compared to 870,724 put contracts. The resultant single-session put/call ratio arrived at 0.91, while the 21-day moving average was 0.73.

Overseas Trading

Stocks in Asia ended lower today, with Seoul-listed securities pacing the regional decline after the death of North Korean leader Kim Jong-il. The news proved to be a boon for defense issues, but most other equities tumbled amid the threat of possible geopolitical turmoil. Meanwhile, property stocks struggled in China, thanks to disappointing housing data released over the weekend. By the close, South Korea's Kospi slid 3.4%, Japan's Nikkei shed 1.3%, Hong Kong's Hang Seng gave up 1.2%, and China's Shanghai Composite retreated 0.3%.

Meanwhile, the major European indexes are moderately higher at midday, despite a fresh round of negative notes from ratings agencies. Late Friday, Fitch lowered its outlook on AAA-rated France to negative from stable, and also warned of possible downgrades for Italy, Belgium, and Spain, amongst other euro-zone countries. However, traders have shrugged off these concerns, with optimism creeping in ahead of a planned conference call among European Union (EU) finance ministers. At last check, the German DAX and the French CAC 40 are both up 1%, and London's FTSE 100 has tacked on 0.1%.

Currencies and Commodities

The greenback is trading fractionally lower this morning, with the U.S. dollar index down 0.03%. Crude oil, meanwhile, has bounced back from six-week lows, with the front-month contract last seen 0.5% higher at $94.24 per barrel. On the other hand, gold futures are on the decline, with the malleable metal down 0.2% to trade at $1,595.50 an ounce.

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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