The Dow Jones Industrial Average (DJIA) held onto the 10,000 level by the skin of its teeth last week, as a late-session rally pushed the Dow some 170 points higher on Friday. That support could be called into question early in today's trading, as U.S. stock futures on the DJIA are up 11 points at 9,952, or about 16 points below fair value, pointing toward a weak open. Meanwhile, the S&P Depository Receipts (SPY) exchange-traded fund (ETF) is hovering above peak put open interest at the 105 level, which corresponds to 1,050 for the S&P 500 Index (SPX) -- a region that could provide additional support for the index. Finally, the CBOE Market Volatility Index (VIX) closed above its 200-day moving average last week, suggesting that the market is moving toward higher volatility, which could mean additional selling pressure.
In earnings news, Hasbro Inc. (HAS) said its fourth-quarter profit climbed 77% to $165.6 million, or $1.09 per share, as revenue rose to $1.38 billion. Analysts were looking for a profit of 81 cents per share. Expectations were low heading into the company's report, as HAS' Schaeffer's put/call open interest ratio (SOIR) of 2.55 rests at an annual high and indicates that puts more than double calls among near-term options. Still, HAS is off 0.15% in electronic trading.
Finally, Electronic Arts (ERTS) will release its quarterly earnings figures after the close, with analysts looking for a profit of 21 cents per share. Historically, ERTS has been shaky in the earnings confessional, besting Wall Street's expectations twice and missing twice during the past four reporting periods. Ahead of the open, ERTS has gained about 1.4%. Options traders have high hopes for ERTS, with the stock's SOIR of 0.49 revealing that calls more than double puts among options with less than three months until expiration. This ratio also ranks below 76% of all those taken in the past year.
Earnings Preview
On the earnings front Loews Corp. (L) and Evergreen Solar Inc. (ESLR) are scheduled to release their quarterly reports today. Keep your browser at SchaeffersResearch.com for more earnings news as it breaks.
Economic Calendar
The economic calendar is blank on Monday, while Tuesday offers up December's wholesale inventories. The December trade balance, weekly crude inventories, and the January Treasury budget will arrive on Wednesday. Thursday heats up with weekly initial jobless claims, January's retail sales, and December's business inventories. Friday brings a quiet close to the week, with only February's University of Michigan consumer sentiment index on tap.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,414,090 call contracts traded on Friday, compared to 1,122,392 put contracts. The resultant single-session put/call ratio arrived at 0.79, while the 21-day moving average rose to 0.63.
**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 looks 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 0.36%. In Asia, stocks started off the week in negative territory. Toyota Motor shed 1.1% despite spending much of the day in positive territory after its president apologized on Friday for safety problems and said the automaker would bring in outside experts to review quality controls. Panasonic lost 5.3% after UBS downgraded the stock to "neutral" from "buy," with additional downward pressure from the yen. Turning to Europe, stocks were hovering near breakeven, with weakness in banking stocks over euro zone sovereign debt problems overshadowing a rally in miners. Over the weekend, European finance ministers tried to assure their counterparts in the G7 that the euro zone's debt crisis is under control. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin.
Currencies and Commodities
The U.S. dollar tagged an eight-month high on Friday, with European sovereign debt continuing to drive investors toward the greenback. In pre-market activity, the U.S. Dollar Index looks a bit fatigued from last week's gains, slipping 0.20% to trade at 80.28. The stronger dollar once again wrought havoc for commodities on Friday, but both gold and crude are taking advantage of the weaker greenback ahead of the open. Specifically, the March crude contract is up 32 cents at $71.51 per barrel, while the April gold futures contract has jumped $16.20 to trade at $1,069 an ounce in pre-market trading.
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.
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