Dow Outperforms in Choppy Trading Day

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"Trading was mixed today, as home builders and consumer discretionary issues performed poorly, while commodities and energy led," summarized Schaeffer's Senior Equity Analyst Joe Bell, CMT, of a session where the Dow Jones Industrial Average (DJI) fared the best of the broader-market indexes. "The ISM Manufacturing Index fell more than expected -- showing its first contraction since November 2012 and lowest reading since June 2009. Various sectors had conflicting reactions to this news."

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

plus...
    Auto sales zoom higher, Apple Inc. ( AAPL ) makes waves in the music industry, and Research In Motion ( BBRY ) option traders place big bets.

The Dow Jones Industrial Average (DJI) started in the green and continued to power higher throughout the trading session, finishing the day just a chip-shot shy of its intraday peak. By the close, the blue-chip index was up 138 points, or 0.9%, at 15,254.03, but still below its 10-day moving average. Today's rally was broad across the Dow, as 28 of 30 components moved higher, led by Intel ( INTC ) and Merck ( MRK ), which respectively gained 4% and 3.8%. The two decliners were Bank of America (BAC) and JPMorgan Chase (JPM), down 0.8% and 0.2%, respectively.

Gains were not as robust for the S&P 500 Index (SPX) , which added 9.7 points, or 0.6%, today, to settle at 1,640.42. The Nasdaq Composite (COMP) was the laggard of the day, muscling 9.5 points, or 0.3%, higher, to end the session at 3,465.37. Both the SPX and the COMP closed near their intraday highs, but both remain below their respective 10-day moving averages.


After a notable gain on Friday, the CBOE Market Volatility Index (VIX) drifted fractionally lower today. The VIX gave back less than 0.1 point, or 0.1%, to settle at 16.28.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The Dow's performance was the real bright spot today," added Bell. "Since it's a price-weighted index, the extremely strong day from Merck ( MRK ) bolstered the index well above its counterparts. The drugmaker was higher following positive results in one of its trials."

3 Things to Know About Today's Market :

  • The Institute for Supply Management (ISM) reported that its manufacturing index suffered a surprise pullback to 49.0 last month -- the first reading south of 50 since November. Elsewhere, the Commerce Department announced that construction spending edged up 0.4% in April to a seasonally adjusted annual rate of $860.8 billion. This also fell short of what economists had been expecting. (Reuters, Bloomberg)
  • Auto sales muscled higher in May, with total light vehicle sales in the U.S. rising 8% from the year-ago period to more than 1.4 million vehicles. Ford Motor (F) said its sales jumped 14% during the month (its best May on record since 2006), while General Motors (GM) announced a 3.1% increase in sales on a year-over-year basis. (Los Angeles Times)
  • In what seems like a preemptive move to launch a streaming music service , Apple Inc. ( AAPL ) signed a deal with Warner Music Group for the rights to its catalog. Apple's annual developers conference starts next Monday, which could be the perfect time to unveil a new project. (The Wall Street Journal, login required)

5 Stocks We Were Watching Today :

  1. Research In Motion Ltd ( BBRY ) calls were in high demand today ahead of the U.S. launch of the Q10 smartphone.
  2. Pandora Media Inc (P) dropped almost 11% on the Apple streaming-music rumors , but one trader made a hopeful short-term bet.
  3. Conservative bullish traders bought a bull call spread in Ciena Corporation (CIEN) ahead of the company's earnings report.
  4. LinkedIn Corp (LNKD) was given a new "outperform" rating -- and a price target of $220 -- but still drifted into the red.
  5. Facebook Inc (FB) back-month puts were in focus today, as the stock continued its recent slide .

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 :

The U.S. dollar was pressured lower following weaker-than-expected manufacturing data, and this helped send crude oil to a higher finish. July-dated oil futures rose $1.48 today, or 1.6%, to settle at $93.45 per barrel. This move was not quite enough to pare Friday's losses in the commodity.

Gold futures also gained ground, as investors grew less concerned of a near-term end to the Federal Reserve's bond-buying efforts. At the close, August gold was sitting $18.90, or 1.4% higher, at $1,411.90 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 , BBRY , DE , INTC , MRK

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