"Economic data was mostly light -- the Empire State
manufacturing survey was the lone 'A-list' item, and topped
expectations -- and there were no major earnings reports," stated
Schaeffer's Trading Analyst Peter Bryans. Aside from a slew of
M&A activity, "It was a rather slow day," with the major market
indexes dancing around breakeven for most of the session. The
Dow Jones Industrial Average (DJIA)
ultimately resolved to the upside, though, inching 5 points higher.
Trading Topic of the Week
Continue reading for more on today's market, including
-- Reasons to Dodge Directional Risk:
Increase the odds of a winning trade
. All other things being equal, a straddle is more likely to end up
a winner than an at-the-money call or put -- the strategy boasts a
42% win rate, compared to roughly 34% for a directional play.
Dow Jones Industrial Average (DJI - 16,781.01)
explored both sides of breakeven, but eked out a gain of 5.3
points, or less than 0.1%, by the close. Sixteen of the Dow's 30
blue chips ended higher, led by The Home Depot, Inc.'s (
) 1.1% rise. UnitedHealth Group Inc. (UNH) paced the declining
minority, shedding 1.5%.
S&P 500 Index (SPX - 1,937.78)
followed a similar path, settling a wishy-washy session with a gain
of 1.6 points, or about 0.1%. The
Nasdaq Composite (COMP - 4,321.11)
fared the best of its peers, advancing 10.5 points, or 0.2%.
CBOE Volatility Index (VIX - 12.65)
spent the session comfortably higher, tacking on 0.5 point, or
3.9%, by the bell.
A Trader's Take
"Futures were lower ahead of the bell, likely due to the
situation in Iraq," added Bryans. "However, the S&P 500 muscled
into positive territory, and the
Russell 2000 Index (RUT)
remains higher year-to-date."
5 Items on Our Radar Today
- The International Monetary Fund (IMF)
lowered its 2014 outlook
for the U.S. today, saying the domestic economy will grow by 2%
this year, versus earlier expectations for a 2.8% growth pace.
IMF economists also expect longer-term economic growth to average
around 2% for the next few years, with full employment not
emerging until late 2017.
- It was another Merger Monday, with a handful of companies
making large buyout bids. Among them: Medtronic, Inc. (MDT) bid
on Covidien plc (COV) for
nearly $43 billion
in cash and stock, while Williams Companies, Inc. (WMB)
offered $6 billion
to merge with Access Midstream Partners LP (ACMP)
(The Boston Globe; Bloomberg)
- Industrial production
rose by a better-than-expected 0.6%
last month after edging 0.3% lower in April, the Federal Reserve
reported. Capacity utilization, meanwhile, hit 79.1%, its highest
reading in nearly six years. In other economic news, the National
Association of Home Builders/Wells Fargo
homebuilder confidence index
ticked 4 points higher this month to 49. Readings south of 50
indicate that the majority of builders view the current market as
unfavorable (versus favorable).
(USA Today; Reuters)
- Despite its technical travails,
Cree, Inc. (
remains a recent favorite among speculative bulls, a trend that
was seen again on Friday.
Amazon.com, Inc. (AMZN)
suffered a price-target cut this morning, and more could be on
the way, given the current analyst landscape.
For a look at today's options movers and commodities
activity, head to page 2.
Oil futures pulled back from a nine-month high today, after
analysts said it was unlikely that violence in Iraq would halt
crude production in the region. By the close, July-dated oil gave
up a penny to end at $106.90 per barrel.
On the other hand, August gold futures extended their winning
streak, tacking on $1.20, or 0.1%, to finish at $1,275.30 an