Dow is Treading Water; All Eyes on Merck, FOMC

After snapping its losing streak last week, the Dow Jones Industrial Average (INDEXDJX:DJI) is flat ahead of the bell, as traders digest the latest big-cap earnings and exercise caution ahead of a central bank meeting. In the corporate spotlight this morning is Dow component Merck & Co., Inc. (NYSE:MRK), which is headed higher after topping analysts' third-quarter per-share earnings projections. Outside of the earnings confessional, Wall Street is awaiting data on housing and regional manufacturing, and will likely be abuzz ahead of the Federal Open Market Committee's two-day policy meeting, which kicks off tomorrow.

• Optimism toward Alibaba Group Holding Ltd (NYSE:BABA) is running high, as the Wall Street rookie received yet another encouraging brokerage note.
• Shares of this Rio-based company soared on Friday, but option bears were nonetheless active ahead of Brazil's presidential election.
• 3 financial heavyweights benefited from a raft of positive analyst attention.

Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are 5 points below fair value.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1.22 million call contracts traded on Friday, compared to 765,885 put contracts. The resultant single-session equity put/call ratio edged higher to 0.63, while the 21-day moving average ticked down to 0.69.

Currencies and Commodities

• The U.S. dollar index is fractionally lower at 85.68.
• Crude oil has shed 0.7% to linger near $80.45 per barrel.
• Elsewhere, gold is down 0.1% at $1,230.60 per ounce.

Earnings and Economic Data

Today's docket contains pending home sales and the Dallas Fed's manufacturing survey. Revealing earnings will be MRK, Twitter (TWTR), Amgen (AMGN), Buffalo Wild Wings (BWLD), Cliffs Natural Resources (CLF), Crocs (CROX), EXACT Sciences (EXAS), and T-Mobile US (TMUS).

Overseas Trading

Stocks in Asia ended mixed today, as traders weighed banking stress-test results out of Europe, and exercised caution ahead of the U.S. Federal Reserve meeting later this week. A cooling yen propelled Japan's Nikkei 0.6% higher, while South Korea's Kospi added 0.3%. Hong Kong's Hang Seng and China's Shanghai Composite fell 0.7% and 0.5%, respectively; brokerage firms were among the biggest decliners, on news that an unprecedented stock-trading agreement between Hong Kong and Shanghai was delayed.

European benchmarks are mostly lower at midday, due to a report that German business confidence fell to a near-two-year low in October. The data has overshadowed the European Central Bank's (ECB) report that 25 of the currency bloc's banks failed stress tests -- fewer than expected. At last check, London's FTSE 100 was down 0.2%, while France's CAC 40 and Germany's DAX were 0.4% lower.

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