Dow Adds 228 Points, S&P Hits New High as Ukraine Worries Subside

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"Just like that, the Russia and Ukraine conflict waned, and this sparked huge buying across the board in global equities," summarized Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Will this Russia/Ukraine moment be the 2014 version of Cyprus? Remember, we had a total freak-out over banking issues in Cyprus last year, and it led to outright panic for about two days, before the market quickly moved higher. This is the trait of a bull market -- it doesn't give you time to get into it. Everyone sits around waiting for a pullback, but that pullback simply doesn't happen. The past three weeks have exemplified that type of move." While some of the major indexes tagged new highs today, the Dow Jones Industrial Average (DJI) more than erased yesterday's losses with its best single-session rally of the year.

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

  • Apple Inc. ( AAPL ) options are historically inexpensive , and options speculators are taking full advantage.
  • One Advanced Micro Devices, Inc. ( AMD ) options bear wagered more than $1 million on future downside in the semiconductor name.
  • A look at six of the richest women in the world , via the latest list of Forbes billionaires.
  • Plus ... President Putin sends his troops packing, Ben Bernanke shares his economic outlook, and Facebook Inc ( FB ) option bulls respond to the latest rumors.
Trading Topic of the Week -- Ways to Win with Aggressive Trades: Don't invest in intrinsic value . If you're expecting a drastic pop or drop in the stock, why not juice your returns even further by capitalizing on the greater leverage of at-the-money options?

The Dow Jones Industrial Average (DJI - 16,395.88) was in recovery mode today, surging out of the gate and continuing to gain ground before settling with a gain of 227.9 points, or 1.4%. In a reversal of Monday's session, all 30 Dow stocks closed higher today, led by American Express Company ( AXP ), which added 2.9%. Bringing up the rear were 3M Co ( MMM ) and Chevron Corporation (CVX), which each added 0.4%.

The S&P 500 Index (SPX - 1,873.91) tagged a new all-time intraday high of 1,876.23 before closing at another new all-time peak, up 28.2 points, or 1.5%. The Nasdaq Composite (COMP - 4,351.97) enjoyed its biggest single-day gain in four months, up 74.7 points, or 1.8%. On an intraday basis, the tech-rich index reached its highest point since April 2000, at 4,357.21.


The CBOE Volatility Index (VIX - 14.10) slumped 1.9 points, or 11.9%, but managed to hold above the 14 level.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"We saw new all-time highs today in the S&P 500 Index (SPX), S&P 400 MidCap Index (MID), and Russell 2000 Index (RUT)," Detrick said. "Small-caps were a champ today. In fact, the RUT gained 2.7% for one of its best days in months. Two weeks ago, we started noting how small-caps had (finally) started to take charge and lead again, which was a clue that new highs were coming. To see small-caps breaking out to new highs today is a very welcome sign, and one that suggests the bulls are still firmly in control. You could try to pick a top like so many traders do, or stick with the trend -- which is higher."

5 Items on Our Radar Today :

  1. With the domestic economic calendar bare, attention again turned to Ukraine , where immediate tensions with neighboring Russia appeared to have lessened. Russian President Vladimir Putin ordered troops back to their bases from the Ukrainian border -- but did defend his country's right to invoke military action if needed. Meanwhile, U.S. Secretary of State John Kerry arrived in Kiev, maintaining the threat of sanctions against Russia and requesting that the situation be "de-escalated." (CNN)
  2. In his first speech since leaving the office of Federal Reserve chair at the end of January, Ben Bernanke expressed a relatively upbeat outlook on the global economy. Speaking at a banker's conference in Abu Dhabi, Bernanke said the U.S. economy would likely expand by 3% this year, and noted that "recoveries are picking up" in the G-7 countries. (MarketWatch)
  3. Rumors of a $60 million drone-maker acquisition sparked activity among Facebook Inc ( FB ) weekly options traders, who scooped up bullish bets.
  4. It's a gastronomic battle between Outback Steakhouse and Olive Garden, as Darden Restaurants, Inc. (DRI) and Bloomin' Brands Inc (BLMN) come toe-to-toe in our Brand Face-Off .
  5. E-Commerce China Dangdang (ADR) (DANG) rallied on sector strength, and inspired front-month call buying.

EARNINGS

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

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Crude futures faltered in Tuesday's trading, as traders became less anxious about the situation in Ukraine. April-dated oil logged a drop of $1.59, or 1.5%, by the close, to settle at $103.33 per barrel.

Gold also lost ground, amid reduced demand for perceived "safe havens." Gold for April delivery closed the day down $12.40, or 0.9%, at $1,337.90 an ounce.

SCHAEFFER'S MARKET POSTURE



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

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


This article appears in: Investing , Options

Referenced Stocks: AAPL , AMD , FB , AXP , MMM

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