Dow Shrugs Off Overseas Malaise to Build On Momentum

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"We had negative news out of global markets -- this time it was China -- yet in the end, the U.S. markets held very tough," said Schaeffer's Senior Technical Strategist Ryan Detrick, CMT, as the Dow Jones Industrial Average shrugged off a slow start to finish up for the second straight trading day. "There wasn't any major headline today, but under the surface you have to be impressed by how the U.S. continues to shake off global economic concerns and trend higher."

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

  • Schaeffer's Senior Options Strategist Tony Venosa, CMT, gives his nine reasons why FedEx Corporation ( FDX ) is a strong candidate for a long trade.
  • Schaeffer's Senior Trading Analyst Bryan Sapp on how overseas markets tried but failed to pull down their American counterparts.
  • Our bi-weekly look at changes in short interest, which uncovered big moves in four stocks.
plus...
  • The markets pick up where they left off last week, why one of the most famous investors in the world thinks Apple ( AAPL ) is a good buy despite its losses, and how investors aren't buying that AAPL shares will recover by the end of the week.

After a slow start caused by down markets in both Europe and Asia, the Dow Jones Industrial Average rallied in the second half of the day to keep last week's momentum going. The Dow gained 38 points, or 0.3%, to finish at 14,127.82. The 30-member Dow saw 19 companies advance, led by Wal-Mart Stores ( WMT ), which climbed 2.1%. The 11 decliners were paced by heavy equipment maker Caterpillar ( CAT ), which fell 1.8%.

The S&P 500 Index (SPX) climbed 7 points, or 0.5%, to close at 1,525.20 -- just shy of its intraday peak. The Nasdaq Composite (COMP) gained 12 points, or 0.4%, to finish at 3,182.03.

The CBOE Market Volatility Index (VIX) fell 1.4 points, or 8.8%, to close at 14.01, dropping back below its 20-day moving average.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

3 Things to Know About Today's Market :

  • Warren Buffett, one of the world's most successful and scrutinized investors, said there are still good deals in the stock market and that he thinks Apple ( AAPL ) is a bargain buy at its depressed levels. (CNBC; CNNMoney)
  • Oil and gas company Hess Corp. ( HES ) today announced it was reshuffling its board and selling its retail, refining and processing businesses to focus on oil exploration and production. (The New York Times)
  • Federal Reserve Vice Chairwoman Janet Yellen aggressively defended the $85-billion-per-month bond buyback program as a way to keep interest rates low and to stimulate the economy. (CBS News)

5 Stocks We Were Watching Today :

  1. With another price retreat for Apple ( AAPL ) late last week, weekly traders showed they don't think the iPod/iPhone maker will broach $450 by this Friday.
  2. Chinese search engine Baidu.com (ADR) (BIDU) dropped on the charts, and option traders used a variety of tactics to try and protect themselves.
  3. Agilent Technologies (A) was targeted by bearish investors looking for losses as springtime comes.
  4. Bears also circled Las Vegas Sands Corp. (LVS) in light of a decline on the charts as well as a new federal investigation.
  5. Delta Air Lines (DAL) said it would make its first profit in the first quarter since 2000, and one investor responded with a bull call spread targeted for April.

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 :

News out of China sent oil futures south, as the April contract dropped 56 cents, or 0.6%, to end the day at $90.12 per barrel. This was the lowest close for black gold since December 24.

Gold gained modest ground, however, on hopes for continued accommodative monetary policy. April-dated gold edged 10 cents higher to settle at $1,572.40 per ounce.

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.

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


This article appears in: Investing , Options

Referenced Stocks: AAPL , CAT , FDX , HES , WMT

Schaeffer's Investment Research

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