Dow Posts Best Week Since January as Markets End Higher

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"There was quite a bit of economic data released today, and most of it relayed the message of modest growth," observed Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Retail sales were slightly worse than expected, and the producer price index signaled a little bit of inflation. The markets generally reacted favorably, as the strong momentum continued into the end of the week." As a result, the Dow Jones Industrial Average (DJI) finished firmly in positive territory.

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

  • Schaeffer's Senior Trading Analyst Bryan Sapp explains why he's looking for "some big volatility" at the end of next week, which also coincides with September options expiration.
  • Despite this morning's price-target hike, bearish option traders -- or possibly anxious shareholders -- zeroed in on Facebook Inc's ( FB ) front-month series of puts.
  • The latest edition of Option Idea of the Week offers up a bullish trading idea on an outperforming ETF surrounded by heavy skepticism.
plus...
    Twitter filed for an IPO, consumer sentiment waned in early September, and Apple ( AAPL ) was hit with (another) downgrade.

The Dow Jones Industrial Average (DJI - 15,376.06) spent the entire session in the black, and tagged an intraday high of 15,380.97 shortly after noon. For the day, the blue-chip barometer ended up finishing 75.4 points, or 0.5%, higher. On a week-over-week basis, the index gained 3%, its best weekly return since January. The Dow's 23 advancers were led by Intel's ( INTC ) analyst-induced 3.6% gain, while Alcoa ( AA ) paced the seven decliners with a loss of 1%.

The S&P 500 Index (SPX - 1,687.99) experienced some rollercoaster price action this morning, surging right out of the gate, only to touch a session low of 1,682.22 an hour later. By the close, however, the SPX was up 4.6 points, or 0.3%. Meanwhile, the Nasdaq Composite (COMP - 3,722.18) gained 6.2 points, or 0.2%. For the week, indexes rose 2% and 1.7%, respectively.


The CBOE Market Volatility Index (VIX - 14.16) had a choppy ride today, as well, and ended up finishing 0.1 point, or 0.9%, lower. The "fear gauge" shed 10.7% for the week, closing below its 20-week moving average once again.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Despite the strong price action we have experienced during the start of September, we are finally set to hear from the Fed next week," continued Bell. "Certainly all eyes will be on Fed Chairman Ben Bernanke, as many market participants are eager to find out if tapering will begin in September, and if so, by how much."

3 Things to Know About Today's Market :

  • The preliminary September reading of the Thomson Reuters/University of Michigan consumer sentiment index arrived at 76.8 -- down from the previous month's final reading of 82.1, and falling short of the consensus view. Adding insult to injury, the latest figure marked the index's lowest level since April, and was attributed to rising interest rates. (MarketWatch)
  • The Commerce Department said retail sales climbed by 0.2% in August, disappointing economists who were expecting an increase of 0.4%. However, last month's figure still marked a fifth consecutive monthly advance. Excluding automobiles, gas, and building materials, core sales rose 0.2%, compared to July's increase of 0.5%. (CNBC)
  • The rumors swirling around Twitter during the past few weeks have turned out to be true, as the social media guru tweeted that it filed for an initial public offering on Thursday. Should the firm become a publicly traded company, expectations will be high. According to eMarketer, Twitter is on track to earn $583 million in advertising revenue this year, and $1 billion in 2014. "My over/under for Twitter at end of first day of trading: $25B," tweeted former PayPal executive David Sacks. (USA Today)

5 Stocks We Were Watching Today :

  1. Apple ( AAPL ) was slapped with a downgrade at Jefferies following this week's new iPhone reveal and yesterday's shareholder news.
  2. A closer look at Zynga ( ZNGA ) shows a bullish slant in the options pits, despite heavy pessimism from the brokerage bunch.
  3. Analysts at HSBC raised their price target for Citigroup (C) this morning, which could help amplify the stock's upward momentum.
  4. As the shares of ARM Holdings (ARMH) took a breather, put buyers zeroed in on the tech concern's September-dated options.
  5. Nokia (NOK) was targeted by longer-term option bears, who wagered on the mobile phone maker to reverse course by early next year.

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 felt the weight of today's weaker-than-expected retail sales and consumer sentiment data, while efforts to avoid a U.S. military strike on Syria also dragged prices lower. By the close, October-dated crude shaved off 39 cents, or 0.4%, to end at $108.21 per barrel. On a weekly basis, black gold shed 2.1%.

Meanwhile, gold futures extended yesterday's decline, as investors await the Fed's policy statement due next week. Gold for December delivery fell $22, or 1.7%, to finish at $1,308.60 an ounce -- the lowest close since Aug. 7. For the week, the precious metal dropped 5.6%.

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.

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This article appears in: Investing , Options

Referenced Stocks: AA , AAPL , FB , INTC , ZNGA

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