"After last week's rally, it was nice to see the bulls defend
their turf and not give back any of the gains," noted Schaeffer's
Senior Technical Strategist Ryan Detrick, CMT. "News was light, and
so were earnings. It seemed like more a buyers' strike than
anything. Still, earnings season hits hard this week, so don't
expect too many more slow and boring days like this one." The
Dow Jones Industrial Average (DJI)
traded in a tight range but finished with a modest gain, bouncing
back from Friday's slight pullback. The
S&P 500 Index (SPX)
, meanwhile, extended its longest winning streak since October.
Continue reading for more on today's market, including
Trading Topic of the Week
- In a battle of social networking giants Facebook Inc (
) and LinkedIn Corp (
which name looks like the better bet
- Judging from the recent price action in the CBOE Volatility
Index (VIX), Schaeffer's contributor Adam Warner says a market
sure feels like it's about to happen
- Micron Technology, Inc. (
) option bulls are betting on a move to
multi-year highs this summer
... Leading indicators come in better than expected, tensions in
Ukraine escalate, and Advanced Micro Devices, Inc. (
) collects post-earnings votes of confidence.
-- 5 Reasons to Dodge Directional Risk:
Increase the odds of a winning trade
. All other things being equal, a straddle is more likely to end up
a winner than an at-the-money call or put -- the strategy boasts a
42% win rate, compared to roughly 34% for a directional play.
Dow Jones Industrial Average (DJI - 16,449.25)
spent most of the session flirting with modest gains, ultimately
settling 40.7 points, or 0.3%, higher. Acquisition-related rumors
helped Pfizer Inc. (
) lead the 17 advancing blue chips, adding 2%. The Walt Disney
Company (DIS) and UnitedHealth Group Inc. (UNH) both lost 1.1% to
pace the declining minority.
S&P 500 Index (SPX - 1,871.89)
finished higher for the fifth straight session, tacking on 7
points, or 0.4%. Meanwhile, the tech-rich
Nasdaq Composite (COMP - 4,121.55)
fared the best of its peers, advancing 26 points, or 0.6%, to notch
its fifth consecutive win.
CBOE Volatility Index (VIX - 13.25)
started off strong, but backpedaled into the red in afternoon
trading. By the close, the market's "fear barometer" shed 0.1
point, or 0.8%.
A Trader's Take
"Earnings season has fit the bill once again," added Detrick.
"Most names to report have beaten the lowered bar. That is pretty
much par for the course anymore, though. What could have much more
of a market-moving impact is if names start to
the lowered bar. I'm not saying that will happen, but should it
start to transpire, a big move lower could result."
5 Items on Our Radar Today
- M&A rumors
hit the pharmaceutical sector
, as Pfizer Inc. (
) is reportedly back in the hunt to acquire AstraZeneca plc (ADR)
(AZN), despite a previously rejected $101 billion bid. Sources
suggest PFE has its eye on AstraZeneca's line of immunotherapies
-- experimental drugs that help bolster a patient's immune system
to fight cancerous tumors.
- The Conference Board reported its
index of leading indicators
rose 0.8% last month, exceeding economists' expectations. This
was the best monthly result since November, and was a further
indication that the U.S. economy is showing signs of life after a
(Associated Press, via CNBC)
- A truce signed between Ukraine and Russia (with aid from the
U.S. and European Union)
didn't last long
, as at least three people were killed during a shootout at an
eastern Ukraine checkpoint manned by pro-Russian separatists.
Russia and Ukraine officials pointed fingers at the other for
instigating the incident.
- On the heels of Thursday's first-quarter earnings report and
Advanced Micro Devices, Inc. (
surged higher in today's trading and earned positive coverage on
Earnings on Deck
: What the landscape looks like for
AT&T Inc. (T) and Cree, Inc. (CREE)
ahead of tomorrow evening's quarterly reports.
For a look at today's options movers and commodities
activity, head to page 2.
Oil futures ended a choppy session in the black, thanks to
geopolitical concerns and reports of domestic refinery disruptions.
By the close, May-dated black gold added 7 cents, or 0.1%, to
finish at a seven-week high of $104.37 per barrel.
On the flip side, gold futures continued their retreat, with the
June contract shedding $5.40, or 0.4%, to end at $1,288.50 an ounce
-- the lowest close for a most-active contract in nearly three
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