Dow Touches New All-Time High as Earnings Roll In

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"We experienced another mixed day of price action, as we continue to trudge through earnings season," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "The Dow Jones Industrial Average (DJI) maintained a leadership role today, as DuPont ( DD ) and United Technologies ( UTX ) reacted positively to their respective earnings reports. Elsewhere, healthcare and biotechnology names showed relative weakness." Thanks to this earnings-induced boost, the Dow tagged an all-time intraday peak, while the S&P 500 edged within a chip-shot of 1,700.

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

  • Schaeffer's Senior Trading Analyst Bryan Sapp expands on the market's "extremely quiet" price action today, and points out NIKE's ( NKE ) bullish potential.
  • This week's edition of Option Trends analyzes how traders have picked sides on three retailing stocks.
  • Weekly bulls loaded up on QUALCOMM ( QCOM ) calls as the firm prepares to report quarterly earnings after tomorrow's close.
plus...
    Cisco Systems ( CSCO ) acquires Sourcefire (FIRE), Starbucks (SBUX) takes on the yogurt business, and pre-earnings bears pounce on Ford (F).

The Dow Jones Industrial Average (DJI - 15,567.74) spiked to a record intraday high of 15,604.22 within the first two minutes of the session, and then gradually pulled back to an intraday low of 15,544.06 by late morning. By the closing bell, however, the blue-chip barometer gained 22.2 points, or 0.1%. The Dow's 20 advancers were led by United Technologies' ( UTX ) surge of 3%, while Travelers Companies (TRV) paced the 10 laggards with an earnings-induced loss of 3.8%.

The S&P 500 Index (SPX - 1,692.39) climbed as far north as 1,698.78 today -- marking a second consecutive day of new record intraday highs -- before turning downward to finish 3.1 points, or 0.2%, lower. Meanwhile, the Nasdaq Composite (COMP - 3,579.27) shed 21.1 points, or 0.6%.

The CBOE Market Volatility Index (VIX - 12.66) was parked in the black for a large portion of the session, closing 0.4 point, or 3%, higher. However, the "fear gauge" is still on pace to finish a third consecutive week below its 20-week moving average.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Despite the markets being potentially overbought in the short term, we continue to experience positive momentum," Bell went on. "Right now, it's all about earnings, and so far, they've been pretty good."

3 Things to Know About Today's Market :

  • In the latest M&A news, Cisco Systems ( CSCO ) inked a deal to acquire Sourcefire (FIRE) , a cybersecurity company, for roughly $2.7 billion. This works out to around $76 per share, representing a 29% premium to FIRE's closing price on Monday. (Bloomberg)
  • Netflix (NFLX) reported a second-quarter profit of $29 million, or 49 cents per share, yesterday, which surpassed both consensus estimates and earnings figures from the year-ago period. However, the stock stumbled today, as the number of newly added subscribers fell short of Wall Street's expectations. (Market Watch)
  • Apparently Starbucks (SBUX) will be adding yogurt to its product lineup next year. The java giant announced that it is forming a partnership with France-based Danone in an effort to expand its own Evolution Fresh brand. The first offering -- a ready-to-eat Greek yogurt parfait -- will be available in the spring. (USA Today)

5 Stocks We Were Watching Today :

  1. Wunderlich Securities upped its price target for Sirius XM Radio (SIRI) ahead of the company's turn in the earnings confessional this week.
  2. Put buyers wagered on post-earnings downside for Ford (F) by this Friday's close.
  3. One Citigroup (C) speculator rolled up a previous short call position.
  4. Bearish bettors were less than impressed with Nokia's (NOK) Lumia 625 debut.
  5. Near-term call players ambushed Advanced Micro Devices' (AMD) August 4 strike once again.

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 oil futures ended higher today, amid expectations that tomorrow's weekly report will show a decline in crude inventories. By the time the closing bell rang, September-dated oil was up 29 cents, or 0.3%, to finish at $107.23 per barrel.

Meanwhile, gold futures declined after notching their largest daily price gain in over a year yesterday. By the closing bell, the August contract slipped $1.30, or 0.1%, to end at $1,334.70 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.

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This article appears in: Investing , Options

Referenced Stocks: CSCO , DD , NKE , QCOM , UTX

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