Dow Posts 12th Straight Winning Tuesday

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"Today was all about health care," said Schaeffer's Senior Equity Analyst Joe Bell as the Dow Jones Industrial Average (DJI) and the S&P 500 Index (SPX) both rallied to new notable peaks, with the Dow winning its 12th Tuesday in a row. "The Centers for Medicare and Medicaid Services announced plans to increase rates and prescription drug benefits. As a result, the health care sector took a leadership role today, and the overall market continues to move higher."

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

plus...
  • Another winning Tuesday for the Dow, auto makers kick off the selling season in style, and a downgrade for Hewlett-Packard ( HPQ ) led to a flurry of bearish options activity.

Spurred by strong auto sales numbers and strength in health care stocks, the Dow Jones Industrial Average (DJI) had its 12th straight winning Tuesday. The Dow jumped 89 points, or 0.6%, to close at 14,662.01 - the Dow also set a second consecutive record high, hitting a peak of 14,684.49 in late-morning trading. The 30-member Dow saw 23 companies increase, led by UnitedHealth Group ( UNH ) , which climbed 4.7% on news that Medicare reimbursements would be higher than anticipated. Hewlett-Packard ( HPQ ) fell 5.2% to lead the six decliners after receiving a key analyst downgrade. Bank of America ( BAC ) was unchanged.

The S&P 500 Index (SPX) also had a big day, closing at 1,570.25, gaining 8 points, or 0.5%. The SPX also set a new five-year high (1,573.66) for the second straight session -- but fell short of the all-time high of 1,576.09. The Nasdaq Composite (COMP) was up as well, finishing at 3,254.86, climbing nearly 16 points, or 0.5%.

The CBOE Market Volatility Index (VIX) dropped 0.8 point, or nearly 6.0%, to close at 12.78. This decline brought the index back below its 10-day moving average, following Monday's move north of this trendline.

A Trader's Take :

"March automotive sales were largely better than expected, which translated into a lift for automakers," Bell noted. "Overall, consumer discretionary stocks had a pretty nice day, too."

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

3 Things to Know About Today's Market :

  • Atlanta Federal Reserve president Dennis Lockhart warned that the central bank could ease its bond-buying initiatives as early as this year if the employment picture continues to improve. Currently, the Fed is purchasing $85 billion in bonds each month to bolster the U.S. economy. (CNBC)
  • Auto and truck sales surged in March according to industry data, with several automakers reporting increases of 5% or better as compared to the same month last year. The Chrysler Group reported its best sales since December 2007. (CNNMoney)
  • U.S. factory orders jumped 3% in February -- led by commercial aircraft -- following a 1% decline in January, according to the Commerce Department. Durable goods orders spiked 5.6%. (CBS MoneyWatch)

5 Stocks We Were Watching Today :

  1. Hewlett-Packard ( HPQ ) was downgraded today by Goldman Sachs, and put buyers swooped in .
  2. Bears looked for LinkedIn ( LNKD ) to move lower for the remainder of the week.
  3. Today's big drop by Delta Air Lines (DAL) didn't scare off bullish option traders looking for both short-term stability and long-term growth.
  4. Facebook (FB) continued to draw short-term option players, both of the bullish and bearish variety.
  5. One trader executed a massive long strangle on The Home Depot (HD), looking for a big move one way or the other by next month.

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 :

May crude futures closed at $97.19 per barrel, up 12 cents, or 0.1%, clawing back nearly all of Monday's drop.

But the rally in equities and a strengthening dollar pushed gold down as it lost its safe-haven appeal. June-dated gold fell $25, or 1.6%, to close at $1,575.90 an ounce -- the lowest close for gold in about four weeks.

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: BAC , CSCO , HPQ , LNKD , UNH

Schaeffer's Investment Research

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