"The big market news of the day was definitely the report that
Larry Summers withdrew his name from the race to become the next
Federal Reserve chairman," noted Schaeffer's Senior Equity Analyst
Joe Bell, CMT. "When you combine that with the agreement between
Russia and the U.S. regarding Syria, we actually received a little
more certainty over a couple of uncertain situations. The market
reacted positively to this clarity, and once again, continued its
strong momentum in September." Against this backdrop, the
Dow Jones Industrial Average (DJI)
kicked off the week with a triple-digit advance.
Continue reading for more on today's market, including
- Schaeffer's Senior Trading Analyst Bryan Sapp summarizes
unexpected gap higher
, and offers up a bearish play on International Business Machines
- Despite a new camera phone offering, this telecom concern
another crop of bearish traders
, a number of which bet on longer-term declines.
- Call buyers have been zeroing in on a
popular tech stock
lately, with a particular focus on the front-months series of
Larry Summers exited the race for Federal Reserve chairman, the
Empire State manufacturing index unexpectedly declined this month,
and outperforming Yelp (
) attracted weekly option bears.
Dow Jones Industrial Average (DJI - 15,494.78)
surged right out of the gate, touching a session high of 15,549.87
around midday. By the end, the index closed 118.7 points, or 0.8%,
higher, marking its loftiest finish since Aug. 8. The blue-chip
bellwether's 26 advancers were led by Boeing's (
) 3.9% gain, while Hewlett-Packard (
) paced the four laggards with a decline of 1.5%.
S&P 500 Index (SPX - 1,697.60)
followed a similar path, and climbed to an intraday peak of
1,704.95, which was just a few points shy of its annual high. For
the day, the SPX gained 9.6 points, or 0.6%. Meanwhile, the
Nasdaq Composite (COMP - 3,717.85)
bucked the broader-market path higher by shedding 4.3 points, or
CBOE Market Volatility Index (VIX - 14.38)
experienced some choppy movement today, and sank to a session low
of 13.87 shortly after noon. By the close, however, the "fear
barometer" was up 0.2 point, or 1.6%.
A Trader's Take
"A large amount of fear entered the market after the late-August
pullback, but the SPX once again finds itself back up near the
annual high of 1,709.67," Bell went on. "In the short term, this
could act as a logical profit-taking area, but the momentum this
month has been incredibly impressive. So many people were expecting
a weak September, and it just goes to show that it can sometimes
pay to think differently from the masses."
3 Things to Know About Today's Market
- Markets surged today amid reports that
has exited the race for chairman of the Federal Reserve. Summers,
a former Treasury secretary and economic adviser to President
Barack Obama, was known as a critic of the central bank's
quantitative easing measures. The decision to take his name out
of the running comes a day before the Federal Open Market
Committee (FOMC) kicks off its two-day meeting, which could
result in the Fed tapering its bond-buying program.
- The New York Fed said its
Empire State manufacturing index
arrived at 6.29 in September, marking an unexpected drop from
last month's reading of 8.24. Breaking the data down even
further, however, the new orders index climbed to 2.35 from 0.27,
while shipments spiked to 16.43 -- their highest level in over a
year -- from 1.47.
- Apple (
) was hit hard by news that China Telecom Corp. has
cut back on subsidies
. In other words, the carrier is charging customers more upfront
for the iPhone 5S compared to last year's prices. An analyst from
Mizuho Securities attributed the cutbacks to China Telecom's
attempt to increase its profitability.
(The Wall Street Journal)
5 Stocks We Were Watching Today
scored a price-target hike at Sterne Agee, as the firm forecast a
continuation of the aerospace company's "healthy buybacks."
- Despite notable year-to-date gains,
Chesapeake Energy (CHK)
has been attracting option bears -- and possibly nervous
shareholders -- of late.
- Put buyers wagered on a near-term decline for uptrending
, just days after the stock tagged a fresh all-time high.
latest buyout buzz, one strategist used September-dated options
to place a bearish volatility bet on the mobile phone maker.
- Near-term call volume surged on
Micron Technology (MU)
, with one group of traders betting on new highs for the security
within the next two weeks.
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures closed at a three-week low today, as supply
concerns were eased by an agreement between the U.S. and Russia to
halt a potential military strike against Syria. By the time the
dust settled, October-dated crude shed $1.62, or 1.5%, to end at
$106.59 per barrel.
Conversely, gold futures recovered from a five-week low, as
investors cheered a shift in the race for Federal Reserve chairman.
Gold for December delivery gained $9.20, or 0.7%, to finish at
$1,317.80 an ounce.
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