Markets Close North of Breakeven, Notch Weekly Gains

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"After a lot of big news over the last several days, and all of the Washington drama that unfolded, we had a relatively quiet end to the week," mused Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Taking a step back from all the headlines and the political circus, the uptrend remains in place, with small-caps and technology stocks continuing to lead, and many sectors reaching new all-time highs." Meanwhile, the Dow Jones Industrial Average (DJI) finished modestly higher, while the S&P 500 Index (SPX) enjoyed a second day of record-high price action.

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

  • Schaeffer's Senior Options Strategist Tony Venosa, CMT, takes a closer look at trading prospects for Caterpillar ( CAT ) in his latest Chart of the Day .
  • Can International Business Machines ( IBM ) live up to the Street's bullish expectations? Read today's Weekly Contrarian for further insight.
  • Call buyers bet on a move higher for this outperforming solar stock by mid-November -- which could encompass the company's next quarterly earnings report.
plus...
    Google ( GOOG ) soared to new heights on strong earnings, Fed Governor Daniel Tarullo called for a more definitive plan regarding struggling banks, and AT&T ( T ) option volume spiked on reports of a new partnership.

The Dow Jones Industrial Average (DJI - 15,399.65) experienced a bit of a rollercoaster ride this morning, but stayed in positive territory during the afternoon hours of trading. By the close, the blue-chip barometer was up 28 points, or 0.2%. For the week, the index added 1.1%. General Electric ( GE ) led the Dow's 19 advancers with a gain of 3.5% after its earnings release, while UnitedHealth Group's (UNH) 3.7% drop paced the 11 laggards.

The S&P 500 Index (SPX - 1,744.50) spiked out of the gate, and touched a record intraday peak of 1,745.31 just before 3:00 p.m. ET. For the session, the SPX advanced 11.4 points, or 0.7% -- notching another all-time closing high. Likewise, the Nasdaq Composite (COMP - 3,914.28) finished 51.1 points, or 1.3%, higher, reaching yet another 13-year intraday acme of 3,914.93. On a weekly basis, the indexes climbed 2.4% and 3.2%, respectively.

Elsewhere, the CBOE Volatility Index (VIX - 13.04) continued to sputter, sinking to a session low of 12.34 near midday. Although the "fear gauge" managed to ease its losses in the afternoon hours, it still finished 0.4 point, or 3.3%, lower -- marking its lowest close in nearly a month. Week-over-week, the VIX shed 17%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Earnings season is starting to get the attention it deserves, and today it was all about Google ( GOOG ) and its positive effect on the technology sector," continued Bell. "Financials and health care stocks also performed well, as Morgan Stanley (MS) released a well-received earnings report."

3 Things to Know About Today's Market :

  • Google ( GOOG ) surmounted the $1,000 mark for the first time ever -- and scored a slew of bullish brokerage notes -- after revealing stronger-than-expected quarterly earnings last night. For the third quarter, the firm reported an adjusted profit of $10.74 per share, besting the consensus view for per-share earnings of $10.34. Meanwhile, consolidated revenue arrived at $14.89 billion, versus the $14.79 billion forecast by analysts. (CNBC, Reuters)
  • Federal Reserve Governor Daniel Tarullo noted that struggling banks could suffer the consequences of an unclear plan by the government. During a Fed conference earlier today, the central bank figure stated that creditors could end up penalizing larger financial institutions with increased rates -- or simply abandon them -- if a resolution process isn't put into place. "If investors and other market actors think the prospects for orderly resolution seem low, they may assume the firm will be rescued by the government, and any moral hazard present in these markets will continue," said Tarullo. (Bloomberg Businessweek)
  • Thanks to the 16-day government shutdown, the Labor Department announced that its nonfarm payrolls data for September will be released on Tuesday, Oct. 22. The department also said it will provide a new schedule for other economic reports delayed by the recent Washington drama. While the jobs data for last month should be unaffected, October's unemployment rate could be questionable, since the survey would have been carried out last week during the shutdown. (CNBC)

5 Stocks We Were Watching Today :

  1. Las Vegas Sands (LVS) enjoyed some bullish analyst attention, after reporting a 79% increase in quarterly earnings post-close yesterday.
  2. The latest installment of Option Idea of the Week offers up a bullish trading idea on apparel retailer L Brands (LTD) .
  3. Advanced Micro Devices (AMD) was slapped with a pair of bearish brokerage notes following the firm's lackluster sequential revenue forecast.
  4. Traders scooped up longer-term calls on Starbucks (SBUX) with hopes the java giant will top the century mark by early next year.
  5. News of a partnership with Tesla Motors (TSLA) may have lured a near-term spread strategist to AT&T's ( T ) options pits.

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 futures closed modestly higher today, despite continued anxieties over the government shutdown's impact, as well as some mixed data out of China . By the time the dust settled, the November contract tacked on 14 cents, or 0.1%, to end at $100.81 per barrel. On a weekly basis, however, oil dropped 1.2% -- its fifth decline in six weeks.

Meanwhile, gold futures eased back from yesterday's rally, as December-dated gold slipped $8.40, or 0.6%, to finish at $1,314.60 an ounce. Still, the precious metal gained 3.7% for the week.

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: CAT , GE , GOOG , IBM , T

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