Dow Swings Wildly as Traders Weigh Sanctions, M&A News

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"The broad market struggled to stay afloat early on, as news from Bank of America Corp ( BAC ) suspending its previously announced capital actions hit the wires before the open," summarized Schaeffer's Senior Equity Analyst Joe Bell, CMT. "This notably caused the financial sector to lag, but overall it was an extremely mixed day, with small-caps underperforming." The Dow Jones Industrial Average (DJI) traded in a 188-point range and spent time on both sides of the flat line, before ending half a percent higher.

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The Dow Jones Industrial Average (DJI - 16,448.74) started its day solidly higher, dipped into the red by the early afternoon, and ultimately closed up 87.3 points, or 0.5%. Pfizer Inc. ( PFE ) led the Dow's 22 advancers with an M&A-related jump of 4.2%, while Nike Inc (NKE) paced the eight decliners, shedding 1.4%.

It was also a rocky session for the S&P 500 Index (SPX - 1,869.43) , which swung as high as 1,877 and as low as 1,850 during the day. The large-cap index eventually ended with a gain of 6 points, or 0.3%. The Nasdaq Composite (COMP - 4,074.40) again underperformed, closing down 1.2 points, or less than 0.1%, despite several peeks into positive territory.

The CBOE Volatility Index (VIX - 13.97) settled slightly lower on the day, off 0.1 point, or 0.6%, after hitting an intraday peak of 15.28.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Despite today's intraday volatility and chaotic price action, many major market indexes are not far from all-time highs," noted Bell. "Also encouraging today was the strength seen amid news of increased merger and acquisition activity in the healthcare sector."

5 Items on Our Radar Today :

  1. The U.S. announced additional sanctions against Russia for its involvement in the rebellion in Ukraine. Seven leaders in the Russian government and 17 companies were impacted, and certain licenses for selected U.S. exports to Russia were also restricted. In response, an adviser with the Kremlin dismissed the sanctions as having "little significance." (Reuters, via CNBC)
  2. Pfizer Inc. ( PFE ) confirmed that it remains interested in acquiring British drug maker AstraZeneca plc (ADR) (AZN), despite being previously rebuffed. The current deal on the table is worth roughly $100 billion, but PFE said today it is willing to pay a "significant premium" over the stock's April 17 closing price. (CNNMoney)
  3. The National Association of Realtors said its pending home sales index rose 3.4% to 97.4 in March, topping economists' expectations. What's more, it was the reading's first increase in nine months. Year-over-year, however, pending home sales have slipped 7.9%. (FOX Business)
  4. J.C. Penney Company, Inc. ( JCP ) continued to gain ground on no news, prompting long call buying among weekly options traders.
  5. Bearish options traders are continuing to target Zillow Inc (Z) , even as the stock has outperformed on the charts.

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 :

Oil futures inched higher on Monday, as investors considered the impact of additional sanctions on Russia. By the close, the June-dated contract had gained 24 cents, or 0.2%, to $100.84 per barrel, as continued concerns about U.S. supplies limited additional gains.

Gold futures dipped lower, settling south of the $1,300 mark. Gold for June delivery lost $1.80, or 0.1%, on the day, to finish at $1,299 an ounce. Potentially impacting the yellow metal was news of abandoned merger talks between Newmont Mining Corp (NEM) and Barrick Gold Corporation (USA) (ABX).

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: BAC , NOK , SIRI , JCP , PFE

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