"Today's news was certainly dominated by earnings reports, with
Apple (
AAPL
)
and
Netflix (
NFLX
)
grabbing the biggest headlines," noted Schaeffer's Senior Equity
Analyst Joe Bell. The former's worse-than-expected announcement
"dragged down the tech-heavy
Nasdaq Composite (COMP)
," Bell said, "causing it to underperform on the day." Meanwhile,
the
Dow Jones Industrial Average (DJI)
pressed higher for the fifth consecutive session and registered
another new multi-year peak in late-morning action.
Continue reading for more on today's market, including
:
plus...
- Apple (
AAPL
) gets cored, Netflix (
NFLX
) sees some Wall Street love, and our tweet of the day offers a
friendly attitude adjustment.
The
Dow Jones Industrial Average (DJI)
made it five in a row, advancing 46 points on the day, or 0.3%, but
closing almost 55 points from its intraday high of 13,879.66.
Roughly two-thirds of the 30 Dow names closed higher, led by
Cisco Systems (
CSCO
)
, which advanced 1.9%. While Hewlett-Packard (HPQ) and Walt Disney
(DIS) finished unchanged, Alcoa (AA) was the Dow's worst performer,
losing 1.2%.
The
S&P 500 Index (SPX)
overtook the 1,500 mark and notched a new multi-year high on an
intraday basis, but this round-number level wasn't going down
without a fight. The index closed with fractional gains, up 0.01
point. The
Nasdaq Composite (COMP)
lagged its index peers as AAPL-tinged reverberations were felt
throughout the technology sector. At the close, the COMP was down
23 points, or 0.7%.
The
CBOE Market Volatility Index (VIX)
traded in a wide range between 12.40 and 13.50 before coming to
rest toward the lower end, up 1.9%, or 0.2 point.
A Trader's Take
:
"The best thing about today's market wasn't the
better-than-expected initial claims report this morning," Bell
opined, "it had to be the incredible response NFLX had to its
earnings report. The stock soared, gaining more than 40% on the
day. Not surprisingly," he added, "consumer discretionary stocks
were among the sector leaders. Despite all we've heard about how
the consumer is dead, these types of names continue to
impress."
3 Things to Know About Today's Market
:
- Weekly jobless claims
declined by 5,000
, tagging the reading's lowest point in five years. The four-week
average of Americans applying for unemployment benefits also
retreated to its lowest level in half a decade.
(USA Today)
- AAPL took it on the proverbial chin in the wake of
Wednesday evening's earnings report
, which flared up existing concerns about slowing demand for the
company's products. While the company is
still the world's most valuable
after today's 12.4% haircut, the gap between it and number-two
name Exxon Mobil (XOM) has dramatically shrunk in recent weeks.
(CNNMoney)
- President Obama nominated former U.S. attorney Mary Jo White
to
lead the Securities and Exchange Commission
(SEC)
, following the resignation of Mary Schapiro in December. White
earned her reputation in New York prosecuting white-collar
crimes, and is a strong choice to advance Obama's proposed reform
of financial markets.
(CNBC)
Today's Top Tweet
:
"When the market goes up, people get angry, when it goes down,
people get angry. Stop being so bitter and maybe you'll see things
clearer."
@jfahmy,
(Joseph Fahmy), 8:06 a.m.
5 Stocks We Were Watching Today
:
- Microsoft Corporation (MSFT) was targeted by
optimistic option traders
ahead of its earnings report.
- Netflix (
NFLX
) scored a
bevy of bullish analyst attention
following its positive turn in the earnings confessional.
- Bearish speculators bet on a
short-term drop
from Las Vegas Sands Corp. (LVS).
- Call buyers
scooped up
weekly and front-month QUALCOMM (QCOM) options, even as the stock
moved lower.
- Cisco Systems (
CSCO
) saw more
call-buying action
in the front-month series of options.
Question of the Day
:
Q
: Is delta fixed once an option is purchased, or does it
change?
A
: Delta is a dynamic variable that changes as the stock price
moves. Delta also changes when the underlying stock's volatility
changes, and as the option approaches expiration. In short, the
delta is
not
fixed once an option is bought, and can change quite a bit from the
time an option is purchased until it expires.
For example, if you buy an out-of-the-money call option and the
stock price rises as expected, your option will go in the money. As
a result, the delta will move closer to 1, or 100%, as expiration
approaches. These changes to your option's delta are quantified by
a separate Greek, known as gamma. Specifically, gamma reflects the
unit change in the delta for a one-point change in the underlying
stock or index.
For a look at today's options movers and commodities
activity, head to page 2.
Commodities
:
Crude futures managed to advance in Thursday's trading, amid
positive economic data from around the globe. The March contract
added 72 cents, or 0.8%, to close at $95.95 per barrel.
February-dated gold futures weren't as fortunate, however, losing
$16.80, or 1%, to close at $1,669.90 per ounce.
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
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