The Dow Jones Industrial Average (INDEXDJX:DJI) is poised to pare most of Friday's losses, after blue chip Pfizer Inc. (NYSE:PFE) confirmed reports of a renewed bid -- worth roughly $100 billion -- for AstraZeneca plc (ADR) (NYSE:AZN). Against this backdrop, PFE is pointed 1.8% higher ahead of the bell. On the economic front, meanwhile, speculators are awaiting data on pending home sales and Dallas-area manufacturing activity.
"The bears once again took control of the market on Friday, as small-caps and tech were the relative laggards," said Schaeffer's Senior Trading Analyst Bryan Sapp. "The Russell 2000 Index (RUT) failed to retake the 1,160 level, and the Nasdaq 100 Index (NDX) failed at 3,600. Going forward, bulls will want to see the indexes' 200-day moving averages hold at roughly 1,110 and 3,400, respectively."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are nearly 90 points above breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,205,943 call contracts traded on Friday, compared to 861,370 put contracts -- the most since April 4. The resultant single-session put/call ratio soared to 0.71, while the 21-day moving average edged higher to 0.59.
From the Trading Floor
"Bearish sentiment was on the rise on Friday, as volume on the SPDR S&P 500 ETF Trust (SPY) weekly 5/2 puts was massive," Sapp added. "Most of this trading looked bought to open and speculative in nature."
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Earnings and Economic Data
Reports hitting the Street today include the National Association of Realtors' pending home sales index and the Dallas Fed's manufacturing survey. Plus, Herbalife (HLF), Buffalo Wild Wings (BWLD), Corning (GLW), Hartford Financial (HIG), Loews (L), NetSuite (N), Questcor Pharmaceuticals (QCOR), Sohu.com (SOHU), and Suncor Energy (SU) will release quarterly earnings.
The Case for Big Moves in IWM and QQQ
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