Markets (and Google) Shake Off Mixed Economic News to Reach New Highs

By
A A A

"After a big day on Tuesday, markets took a bit of a break today," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Overall economic data was rather weak, and Deere & Company ( DE ) had some very cautious things to say about the rest of the year. Nonetheless, again the bad news was brushed aside" and the Dow Jones Industrial Average (DJI) finished higher, notching another new all-time peak along the way.

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

plus...
  • The services sector takes over, Google ( GOOG ) flips on the tunes, and Advanced Micro Devices ( AMD ) bears see rocky times ahead.

Another day, another new high for the Dow Jones Industrial Average (DJI) , which gained 60.4 points, or 0.4%, to close at 15,275.69 after peaking at a fresh apex of 15,301.34 in midday trading. Of the 30 Dow components, 23 closed in the black today, led by financial heavyweights American Express ( AXP ) and JPMorgan Chase (JPM), which gained 1.8% and 1.7%, respectively. Bringing up the rear was Hewlett-Packard (HPQ), which logged a 2.6% loss.

The S&P 500 Index (SPX) also traveled into uncharted territory, peaking at 1,661.49 before closing up 8.4 points, or 0.5%, at 1,658.78. For its part, the Nasdaq Composite (COMP) lagged its index peers but tagged an intraday high of 3,475.48 -- a level not visited in a dozen years -- and closed up 9 points, or 0.3%, at 3,471.62 .

Even while the market averages advanced, the CBOE Market Volatility Index (VIX) pressed higher as well, tacking on less than 0.1 point, or 0.3%, to end the session at 12.81, just off its intraday nadir. While the VIX did overcome its 10-day moving average (and peaked at 13.43) in intraday trading, it closed just beneath this short-term trendline.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Today's earnings reports showed what a dichotomy we're working with," quipped Detrick. "On one hand, Deere was rather cautious, but on the other hand, Macy's (M) earnings looked very strong. We've been seeing this really all year now. Retail and consumer discretionary stocks have done very well," he continued, "while some of the manufacturing or metals and mining companies have done very poorly. Just look at ISM services data versus ISM manufacturing. Our economy has changed to one that is services-based. There just aren't as many opportunities in the manufacturing areas as there were just 10 years ago."

3 Things to Know About Today's Market :

  • The producer price index (PPI ) declined by a seasonally adjusted 0.7% in April, according to the Labor Department. This was the steepest drop since February 2010 and was a surprise for economists, who had expected a less dramatic pullback. The core reading -- which excludes food and energy from the equation -- edged up 0.1%. (Bloomberg)
  • Homebuilders have shown increased confidence of late, according to the latest findings from the National Association of Home Builders/Wells Fargo builder sentiment index. This month, the index ticked up to 44, from 41 in April, marking the first increase in 2013. Readings below 50, however, still suggest negative sentiment. (FOX News)
  • Confirming earlier rumors, Google Inc ( GOOG ) announced All Access -- a streaming music service priced at $9.99 per month to compete with Spotify and Pandora Media (P). The service will be available in app form for smartphones and tablets, as well as via web browsers. Google shares jumped to a new all-time high of $916.38 today and settled up 3.3%, well north of the $900 mark at $915.89. (Chicago Tribune)

5 Stocks We Were Watching Today :

  1. Put buyers bet that Advanced Micro Devices ( AMD ) will drop 10% between now and mid-July.
  2. Bears weren't spooked by Activision Blizzard's (ATVI) move to a new multi-year peak, opting to scoop up back-month, out-of-the-money puts.
  3. Zynga Inc (ZNGA) moved higher on positive news, spurring more attention among call buyers.
  4. SodaStream International (SODA) was handed a second consecutive vote of confidence , as Roth Capital boosted its price target.
  5. Put buyers descended upon Live Nation Entertainment (LYV) in droves, focusing on the June 13 strike.

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 bucked its four-day downtrend, albeit barely, to edge into the black by the close. June-dated crude futures added 9 cents, or 0.1%, to end the session at $94.30 per barrel. Oil had moved lower earlier in the session against the backdrop of a rising U.S. dollar and disappointing economic reports from across the Atlantic.

Gold futures were again lower on the day, dipping below the $1,400-an-ounce threshold to end at its lowest point since April 19. Rising equities and a stronger greenback spurred a drop of $28.30, or 2%, in June-dated gold, which closed at $1,396.20 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: AMD , AXP , DE , GOOG , SIRI

Schaeffer's Investment Research

Schaeffer's Investment Research
  • See all for Schaeffer's Investment Research
  • View Print Version

More from Schaeffer's Investment Research:

Related Videos

How to Fire Your Adviser
How to Fire Your Adviser            

Stocks

Referenced

Most Active by Volume

7,047,094
  • $42.4901 ▼ 0.51%
6,802,734
  • $101.2664 ▲ 0.40%
6,159,113
  • $17.96 ▲ 2.57%
5,988,648
  • $16.75 ▲ 0.24%
5,133,970
  • $16.205 ▲ 0.28%
4,643,084
  • $46.5968 ▼ 0.35%
3,773,487
  • $10.095 ▲ 4.72%
3,754,722
    $16.75 unch
As of 9/17/2014, 09:54 AM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com