Promising Economic Data Pushes Markets North of Breakeven

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"We had a slew of better-than-expected economic reports this morning, as initial jobless claims, factory orders, and the ISM non-manufacturing index all surpassed most estimates," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "The market managed a small gain, as many participants continue trying to predict if the Fed will begin tapering its bond-buying program at its September meeting." To that end, the Dow Jones Industrial Average (DJI) closed the session with a modest advance.

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

  • Schaeffer's Senior Trading Analyst Bryan Sapp reiterates his bearish market stance -- despite today's "blowout economic numbers."
  • In his Chart of the Day column, Schaeffer's Senior Options Strategist Tony Venosa, CMT, lists 10 reasons why bulls should keep an eye on NVIDIA ( NVDA ).
  • The latest edition of Option Trends examines three stocks that have been popular among options traders lately.
plus...
    Weekly jobless claims declined, the ISM's non-manufacturing index hit its highest peak since late 2005, and November option bulls pounced on Citigroup ( C ).

The Dow Jones Industrial Average (DJI - 14,937.48) tagged an intraday high of 14,987.47 within the first hour of trading, but gradually pared its gains throughout the session. Nevertheless, the blue-chip barometer still managed to finish 6.6 points, or 0.04%, higher. The Dow's 15 advancers were led by UnitedHealth Group ( UNH ) and American Express ( AXP ) -- both of which added 0.9% -- while Home Depot ( HD ) paced the 15 laggards with a decline of 1.6%.

The S&P 500 Index (SPX - 1,655.08) also touched a session peak of 1,659.17 during the morning hours of trading, and ended with a modest gain of 2 points, or 0.1%. Meanwhile, the Nasdaq Composite (COMP - 3,658.78) rose 9.7 points, or 0.3%.

The CBOE Market Volatility Index (VIX - 15.77) spent most of the day in the red, sinking to an intraday low of 15.63 during the latter half of the session. By the close, the "fear barometer" was off 0.1 point, or 0.7%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"After some volatility and heavy selling during the past couple of weeks, the downward momentum has definitely slowed, and it seems like many of the major sectors are starting to regain their footing," Bell went on. "With Syria looming and the Fed decision right around the corner, there is still a healthy dose of uncertainty surrounding this market."

3 Things to Know About Today's Market :

  • The Labor Department said weekly jobless claims fell by a larger-than-expected 9,000 last week to a seasonally adjusted 323,000 -- just slightly above a five-and-a-half year low. Meanwhile, the four-week moving average for first-time unemployment filings fell by 3,000 to 328,500, marking its lowest level since October 2007. (MarketWatch)
  • Meanwhile, the Automatic Data Processing (ADP) employment report showed that private employers created 176,000 jobs in August, the bulk of which came from the service sector. However, last month's data reflects a drop from July's adjusted total of 198,000, and came in below economists' projections for an increase of 180,000. (CNBC)
  • The Institute for Supply Management (ISM) revealed that its non-manufacturing index arrived at 58.6 last month, up from July's reading of 56. The August figure exceeded consensus estimates for a reading of 55, while also notching the index's highest level since December 2005. (Reuters)

5 Stocks We Were Watching Today :

  1. Groupon (GRPN) traded higher today, thanks to an upgrade at Morgan Stanley ahead of the opening bell.
  2. Short-term traders wagered on a bounce for Sirius XM Radio (SIRI) by picking up the stock's October-dated calls.
  3. Speculators placed bullish bets on Bank of America (BAC) amid this morning's lawsuit update.
  4. A closer look at BlackBerry (BBRY) reveals the mixed sentiment floating through the Street.
  5. Citigroup ( C ) saw a surge in call volume, most notably within the November series of options.

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 muscled back atop the $108 mark, boosted by ongoing anxieties regarding potential U.S. military action against Syria, as well as a notable decline in gasoline supplies. By the closing bell, October-dated oil tacked on $1.14, or 1.1%, to finish at $108.37 per barrel.

Conversely, gold futures fell for the fifth time in six days, as today's upbeat economic data strengthened the greenback. The malleable metal's December contract lopped off $17, or 1.2%, to close at $1,373 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: AXP , C , HD , NVDA , UNH

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