Dow, S&P 500 Tag New All-Time Highs in Choppy Trading

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"Investors are waiting to digest several key economic reports this week, and retail sales failed to impress this morning," observed Schaeffer's Senior Equity Analyst Joe Bell, CMT. "The overall reaction of the market was that this report didn't show much renewed strength from consumers after a terrible winter. In response, we saw a mixed day from stocks and strength in bonds." Still, this didn't stop the Dow Jones Industrial Average (DJI) and the S&P 500 Index (SPX) from reaching new all-time intraday highs, though both had slightly pared their respective gains by the close.

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

  • Analysts haven't wasted any time weighing in on big names such as J.C. Penney Company, Inc. ( JCP ) and Cisco Systems, Inc. ( CSCO ) ahead of earnings.
  • While Cinco de Mayo is behind us, you don't want to miss this week's Brand Face-Off between Chipotle Mexican Grill, Inc. ( CMG ) and Taco Bell parent Yum! Brands, Inc. ( YUM ).
  • Option players rolled the dice on Keurig Green Mountain Inc ( GMCR ) , after The Coca-Cola Company (KO) upped its stake in the java giant.
  • Plus ... Retail sales barely budge, Microsoft Corporation (MSFT) rolls out a new gaming device, and merger chatter overtakes Wall Street.
Trading Topic of the Week -- Ways to Interpret Short Interest: Weigh the short interest ratio . This handy little indicator tells you approximately how much future buying power is pent up among the short-selling crowd.

The Dow Jones Industrial Average (DJI - 16,715.44) peaked at a new all-time high of 16,735.51 about an hour into the session, but pared some of its gains by the close. At the bell, the blue-chip index was up 20 points, or 0.1%, securing a new all-time closing high as well. Microsoft Corporation (MSFT) led the Dow's 17 outperforming names, rising 1.8%, while CSCO brought up the rear, losing 1.4% today.

The S&P 500 Index (SPX - 1,897.45) also reached a new peak -- hitting 1,902.17 this morning -- before settling fractionally higher, up 0.8 point, at another new closing high. The Nasdaq Composite (COMP - 4,130.17) lagged its peers, which was reminiscent of last week. The tech-laden index ended the session off 13.7 points, or 0.3%.

The CBOE Volatility Index (VIX - 12.13) spent time on both sides of breakeven --visiting an intraday low of 12.05 mid-morning -- before ultimately closing down 0.1 point, or 0.8%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"We continue to see rumors of mergers and acquisitions out there," continued Bell. "The latest reports are that AT&T Inc. (T) is close to offering $50 billion for DIRECTV (DTV), which would be a major deal in the telecommunications sector. It's a good sign that companies with tons of cash on their balance sheets continue to see big-time value in this market."

5 Items on Our Radar Today :

  1. Retail sales were little changed in April , edging up 0.1% amid declines at furniture and electronic stores, as well as in restaurants and bars. The March number, on the other hand, was revised higher to reflect a 1.5% increase, the widest single-month jump in four years. Elsewhere, business inventories rose 0.4% in March, falling just shy of economists' estimates. The inventory-to-sales ratio was unchanged at 1.30. (Reuters, via CNBC; MarketWatch)
  2. MSFT announced a $399 version of its Xbox One gaming system. The cheaper version, which hits shelves on June 9, comes without the Kinect feature, a voice- and motion-sensing device. The model equipped with Kinect will still be available for $499, but the new offering is designed to provide "consumers choice at retail," noted a MSFT executive. (USA Today)
  3. Short- and intermediate-term put buyers targeted Take-Two Interactive Software, Inc. (TTWO) ahead of tonight's turn in the earnings confessional.
  4. Merger chatter continued to occupy the Street today. At the forefront of the conversations were AT&T and Pfizer Inc. (PFE) .
  5. One Nokia Corporation (ADR) (NOK) options speculator spent more than $555,000 on an intermediate-term bullish bet .

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 futures continued to climb in Tuesday's session, nearing a three-week high in the process ahead of tomorrow's inventories report. The June-dated contract rose $1.11 today, or 1.1%, to settle at $101.70 per barrel.

Gold resumed its recent downtrend, as investors opted against a safe-haven alternative amid global gains in equities. Gold for June delivery lost $1, or 0.1%, on the day, settling at $1,294.80 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: JCP , CSCO , CMG , YUM , GMCR

Schaeffer's Investment Research

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