Midday Market Check - A Quiet Morning for the Dow Jones Industrial Average

3/12/2010 1:23 PM

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We head into the second half of the session with another lackluster midday picture. The Dow Jones Industrial Average (DJIA) opened with a small rally but that quickly gave way to a minor dip into negative territory. The average has traded in a low-to-high range of only 50 points so far and currently sits 10 points above the breakeven line. The S&P 500 (SPX), Nasdaq Composite (COMP), and Russell 2000 (RUT) are also flat.

Chart Courtesy of Thomson Reuters

Today's strongest groups are the Oil Service HOLDRS (OIH), iShares Treasury Bond (TLT), and S&P Retail Index (RLX). However, the gains are limited. The US Oil Fund (USO), Amex Gold Bugs Index (HUI), and streetTRACKS Gold (GLD) are the weakest areas.

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SUPERVALU INC. (NYSE: SVU), The Mosaic Company (NYSE: MOS), and Potash Corp. of Saskatchewan (NYSE: POT) are among the stocks seeing unusual option volume so far today.

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Supervalu tops today's list amid buyout chatter. Total option volume is 22 times the average with calls dominating. Shares of SVU are up 5%. This morning's put skew scan noted that Potash Corp was bid up in early action. Shares of POT tagged a new annual high and are up 7%. Options are 3 times as active as normal with calls making up 61% of the action. The Mosaic Company is up 6% and calls are active there as well.

Yesterday ended with the S&P 500 still flirting with a breakout. Today brings more of the same. The SPX did tick to a new annual high this morning but the momentum was short lived. The flat action here doesn't offer much of a change from what was noted last night. As has been the case for the last few sessions, the Nasdaq Composite and Russell 2000 are sitting above former resistance. All of the indexes are holding near-term uptrends but all are showing short-term overbought readings.

-posted by Nick Perry
3/12/2010 1:23 PM