Choppy Trading Day Results in Another New S&P 500 Record


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"The short-term positive momentum that began earlier this week continued today," observed Schaeffer's Senior Equity Analyst Joe Bell, CMT. "According to the ADP employment report, private-sector jobs rose by 191,000 in March, which was actually below the consensus view. We did get a pretty nice upward revision in the February jobs number, though. And overall, the report did little to shake the markets, as the slow grind higher continued." The Dow Jones Industrial Average (DJI) continued to flirt with new-high territory, but narrowly missed the mark, closing moderately higher.

Continue reading for more on today's market, including :

  • Why MannKind Corporation ( MNKD ) surged out of the gate (and closed with a gain of nearly 75%).
  • Short-term bears placed bets against Yelp Inc ( YELP ) , as the stock's implied volatility continues to rise.
  • High-frequency trading is in the spotlight once again, but as Schaeffer's contributor Adam Warner points out, this is " hardly a new issue ."
  • Plus ... An update on hiring in the private sector, a big change for Google Inc ( GOOG ) shares, and two distinct strategies in Myriad Genetics, Inc. ( MYGN ).
Trading Topic of the Week -- Trading Low-Priced Options: DO buy higher-delta options . The closer an option's delta is to 1.00 (for a call, or negative 1.00 for a put), the likelier it is that the option will retain some intrinsic value at expiration. This offers you some "insurance" against the possibility of a total loss.

The Dow Jones Industrial Average (DJI - 16,573.00) added 40.4 points, or more than 0.2%, but remains in negative territory for 2014 by the slimmest of margins. (The blue-chip index ended 2013 at 16,576.66.) Of the Dow's 30 components, 19 ended the day higher, led by Caterpillar Inc. ( CAT ), which tacked on 2.8%. American Express Company (AXP) paced the declining minority with a drop of 0.6%.

The S&P 500 Index (SPX - 1,890.90) put in another all-time high close, and hit a new intraday peak of 1,893.17. By the close, the index had risen 5.4 points, or 0.3%. The Nasdaq Composite (COMP - 4,276.46) slightly lagged its peers, gaining 8.4 points, or 0.2%.

The CBOE Volatility Index (VIX - 13.09) ended Wednesday's session down a fraction, losing 0.01 point, after spending time on both sides of breakeven.



A Trader's Take :

"Most equities began the day pretty flat, but slowly churned higher and the SPX once again made a new all-time high on an intraday basis," summarized Bell. "Industrial stocks performed quite well, while technology stocks continued to struggle relative to many other sectors."

5 Items on Our Radar Today :

  1. ADP's report on private payrolls -- a natural precursor to Friday's nonfarm payrolls report -- revealed that the private sector added 191,000 jobs last month, with small businesses contributing the most to this growth. February's reading was revised higher to reflect additional gains of 39,000. (USA Today)
  2. Factory orders rose 1.6% in February, the Commerce Department reported, marking the biggest monthly increase since September. The figure came in north of estimates, and was another indication that the adverse effects of winter weather may be slowing. (FOX Business)
  3. Google Inc ( GOOG ) plans to execute a 2-for-1 stock split after today's close. Additionally, the Internet giant will introduce two tiers of shares: Class A shares will trade under the newly introduced "GOOGL," while Class C will retain the "GOOG" symbol. (San Jose Mercury News)
  4. Myriad Genetics, Inc. ( MYGN ) has been targeted by put buyers and sellers ahead of its quarterly earnings report.
  5. On the heels of its monthly sales note, Ford Motor Company (F) was initiated with a tepid price target and rating at Nomura this morning.


For a look at today's options movers and commodities activity, head to page 2.



Commodities :

Crude oil fell again today, losing ground for the third consecutive session. The weekly inventories report revealed an unexpected drop in supplies, but this was attributed to the brief interruption of a channel in Houston. By the close, May-dated crude had backpedaled 12 cents, or 0.1%, to end at $99.62 per barrel.

Gold gained ground after a five-session losing streak, as investors looked to capitalize on the metal's "safe haven" appeal ahead of Friday morning's jobs report. The June contract rose $10.80, or 0.8%, settling at $1,290.80 an ounce.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing Options
Referenced Stocks: MNKD , YELP , GOOG , MYGN , CAT

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