Dow Hits Another New High as Investors Digest Fed Remarks

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"The major markets were up early and maintained strong momentum throughout the day," said Schaeffer's Senior Equity Analyst Joe Bell as the Dow Jones Industrial Average (DJI) hit a new record high en route to a second straight winning day. "Although we didn't get any certainty about the Cyprus situation, that country's parliament rejected conditions of the proposed Euro zone bailout. Most investors don't seem too worried about this situation, as equities continue to churn higher."

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

  • Our Senior Trading Analyst Bryan Sapp on the anxiety surrounding the Federal Reserve's announcement; plus, a closer look at the technical performance of Murphy Oil Corporation ( MUR ).
  • Facebook ( FB ) gets hit with a bevy of short-term calls.
  • Our Weekly Contrarian: Microsoft ( MSFT ) is getting weighed down by its consumer efforts, but option players remain optimistic.
plus...
  • The markets shake off the early week blahs for a win, the Federal Reserve keeps its stimulus in place, and how bullish option traders surrounded online game maker Zynga ( ZNGA ) today.

The Dow Jones Industrial Average (DJI) blew off the doldrums from earlier this week to post its second straight win, hitting a new all-time high of 14,546.82 in mid-afternoon activity. The Dow gained nearly 56 points, or 0.4%, to finish at 14,511.73. The 30-member Dow saw 24 of its members advance, led by Cola-Cola ( KO ), which climbed 1.4%. The six decliners were paced for the second straight day by Caterpillar (CAT), which fell 1.5%.

The S&P 500 Index (SPX) also gained, picking up 10 points, or 0.7%, to close at 1,558.71. The Nasdaq Composite (COMP) finished at 3,254.19, up 25 points, or 0.8%.

The CBOE Market Volatility Index (VIX) dropped nearly 2 points, or 12%, to close at 12.67.

A Trader's Take :

"Homebuilding stocks continued their impressive rally," Bell noted. "Meanwhile, the Federal Reserve released its Federal Open Market Committee statement, suggesting it expects moderate economic growth, following a pause late last year."

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

3 Things to Know About Today's Market :

  • The Federal Open Market Committee (FOMC) today kept its $40-billion per month bond buyback program in place, kept interest rates low, and predicted "modest growth" for the economy this year. (MarketWatch)
  • The turmoil in Cyprus continues , with the country now facing bankruptcy after its parliament rejected the bailout deal from the European Union and International Monetary Fund over concerns of a proposed tax on bank deposits. (CNNMoney)
  • JPMorgan (JPM) reached a $546 million settlement with the trustees of the failed brokerage unit of MF Global Holdings, allowing the latter firm to repay its customers. JPM was the largest creditor in a $1.2 billion loan to MF Global, which declared bankruptcy in 2011. (Chicago Tribune)

5 Stocks We Were Watching Today :

  1. Despite a brief downturn by online gaming producer Zynga Inc ( ZNGA ), option bulls sought short-term gains.
  2. Bulls also swarmed Hewlett-Packard (HPQ) as it held its annual meeting and tried to keep up recent momentum.
  3. Akamai Technologies (AKAM) faces some technical resistance to a big climb, but that didn't stop bullish traders from seeking a decent-sized jump in the coming month.
  4. Starbucks (SBUX), however, was the target of short-term bears looking for a fairly steep drop by the end of the week.
  5. And investors also bet that Agrium (AGU) would sink below its technical support, trading a flurry of bearish puts.

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 :

Oil rose today, sparked by the news that the Federal Reserve expects "moderate" economic growth and an unexpected drop in supplies last week. Expiring April futures jumped 80 cents, or 0.9%, to $92.96 per barrel. The newly front-month May contract added 98 cents, or 1.1%, to close at $93.50 per barrel.

Gold, meanwhile, dropped for the first time in five sessions. April gold finished down $3.80, or 0.2%, at $1,607.50 an ounce ahead of Federal Reserve Chairman Ben Bernanke's scheduled remarks.

SCHAEFFER'S MARKET POSTURE

At the end of every market day, the staff at Schaeffer's Investment Research reviews the trading day in detail, covering major events and key market developments. Don't miss this critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.



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.

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This article appears in: Investing , Options

Referenced Stocks: FB , KO , MSFT , MUR , ZNGA

Schaeffer's Investment Research

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