Markets Spike on Global Economic Data, Syria Optimism

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"Some optimism that a U.S.-lead strike on Syria is on hold brought more buyers out today," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "It was nice to see that the big reversal on Friday found some buyers. The news and headlines are scary, but we continue to see leadership from small-caps." This easing anxiety, combined with the release of upbeat data out of China, propelled the Dow Jones Industrial Average (DJI) 140.6 points higher for the day.

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

plus...
    Strong Chinese export data spurred U.S. markets higher, consumer credit surged in July, and Groupon ( GRPN ) touched a fresh 12-month peak.

The Dow Jones Industrial Average (DJI - 15,063.12) climbed higher right out of the gate, and touched an intraday high of 15,088.41 during the afternoon hours. By the end of the session, the blue-chip index was up 140.6 points, or 0.9% -- closing above its 20-day moving average for the first time since Aug. 5 and north of 15,000 for the first time in more than two weeks. Caterpillar ( CAT ) led the Dow's 29 advancers with a gain of 2.6%, while Verizon Communications ( VZ ) -- the sole laggard -- shed 0.9%.

The S&P 500 Index (SPX - 1,671.71) also charged northward early on in the session, and finished 16.5 points, or 1%, higher. Meanwhile, the Nasdaq Composite (COMP - 3,706.18) surged 46.2 points, or 1.3%.

The CBOE Market Volatility Index (VIX - 15.63) spent a portion of the morning in positive territory, but reversed course to tag an intraday low of 15.22 later in the day. By the closing bell, the "fear barometer" was 0.2 point, or 1.4%, lower.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Last Friday morning is looking like the big flush we were hoping for," continued Detrick. "Fear spiked, and then the buyers stepped up and continued to push things higher today. Overall, the U.S. economy continues to improve, and even China is reporting strong economic data -- sparking buying in the economically sensitive materials group. Lastly, housing has done very poorly over the past few months, but the sector had a huge day today. If housing can find its footing, it could be a key sign that this September rally may continue to surprise and move higher."

3 Things to Know About Today's Market :

  • China's exports climbed higher than expected last month, according to the Customs Administration. Thanks to improving demand in major markets, the region's exports rose by 7.2% on a year-over-year basis, while imports rose 7%, yielding a trade surplus of $28.6 billion. Economists, on average, were expecting a 6% gain in exports and an 11.3% rise in imports, for a trade surplus of just $20 billion. (CNBC)
  • The Federal Reserve said consumer credit increased by $10.4 billion in July to a seasonally adjusted $2.85 trillion, which marked a yearly growth rate of 4.4%. Breaking the numbers down further, revolving credit -- which is mostly credit card loans -- dropped to an annual rate of 2.6%, marking its second consecutive monthly drop. Meanwhile, nonrevolving credit, which is largely comprised of school and auto loans, rose to an annual rate of 7.4%. (MarketWatch)
  • John Williams was the latest policymaker to offer up his opinion on the central bank's plans to taper its bond-buying program . After a speech delivered at the National Association for Business Economics, the San Francisco Fed president told reporters that while he is "still 100% on board with Chairman (Ben) Bernanke's timeline," he has not yet decided whether to support an $85-billion reduction in monthly bond purchases at next week's Federal Open Market Committee (FOMC) meeting. "I am going to go into that meeting with an open mind and listen to my colleagues and discuss," he said. (Reuters)

5 Stocks We Were Watching Today :

  1. FBN Securities boosted its price target for Apple ( AAPL ) , ahead of tomorrow's much-discussed media event.
  2. Front-month call buyers converged on Groupon ( GRPN ) amid this morning's M&A news, which triggered a new annual high.
  3. Nokia ( NOK ) was slapped with a downgrade and a price-target cut at Danske Bank, following last week's deal with Microsoft (MSFT).
  4. An analyst-induced drop for Tesla Motors (TSLA) lured call sellers and put buyers to the trading table, who focused on weekly options.
  5. Chatter regarding a buyout bid for BlackBerry (BBRY) may have prompted one strategist to initiate a short strangle on the mobile phone maker.

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 backed away from Friday's 28-month high, as ebbing fears regarding a potential military strike against Syria pushed prices lower. By the closing bell, October-dated oil dropped $1.01, or 0.9%, to finish at $109.52 per barrel.

Meanwhile, gold futures remained nearly flat, as investors speculated over when the Fed will start scaling back its bond-buying program. The malleable metal's December contract added a modest 20 cents to end at $1,386.70 an ounce.

SCHAEFFER'S MARKET POSTURE



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This article appears in: Investing , Options

Referenced Stocks: AAPL , CAT , GRPN , NOK , VZ

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