Stocks Kick Off the Third Quarter with Modest Gains

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"After a wild and volatile June, July started off on the right foot," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT, of a day where the Dow Jones Industrial Average (DJI) advanced almost half a percent but fell short of the 15,000 level at the closing bell. "The overall economic backdrop today was positive, as manufacturing data out of Europe and the U.S. was better than expected. Given that this is a holiday week, though, I expect to see some muted movement over the next few days until we get to Friday and the monthly employment data."

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

plus...
    Manufacturing activity enters expansion mode, construction spending improves, and Facebook ( FB ) bears stay active.

Although the Dow Jones Industrial Average (DJI - 14,974.96) didn't manage to overtake the 15,000 level by the close (thanks to a late-day round of selling), it did settle with a gain of 65.4 points, or 0.4%. Of the 30 components of the blue-chip index, 21 were higher on the day, with United Technologies ( UTX ) gaining 1.9% to take the top spot. Pacing the nine decliners was Intel ( INTC ), which dropped 1.4%.

The S&P 500 Index (SPX - 1,614.96) edged above its 20-day moving average in intraday trading, but ultimately closed just a hair shy of this trendline, up 8.7 points, or 0.5%. The Nasdaq Composite (COMP - 3,434.49) , meanwhile, posted a gain of 31.2 points, or 0.9%.


The CBOE Market Volatility Index (VIX - 16.37) gave back an additional 0.5 point, or 2.9%, to settle at its lowest close since June 10.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Although it was buried under the headlines, I was very encouraged by Amgen ( AMGN ) offering to buy Onyx Pharmaceuticals (ONXX) at nearly a 40% premium," added Detrick. "This type of activity shows there is confidence in current prices. We haven't seen a lot of merger-and-acquisition activity, but when we do, the prices bigger companies are willing to pay are very substantial."

3 Things to Know About Today's Market :

  • The Institute for Supply Management (ISM) reported its manufacturing index rose to 50.9 in June from 49.0 the previous month. The 50 threshold is notable, as it defines the point between expansion and contraction. (Bloomberg)
  • Construction spending edged up 0.5% in May to a seasonally adjusted annual rate of $874.9 billion, the Commerce Department noted. The reading represented a 5.4% jump on a year-over-year basis, and now sits at its highest point since October 2008. (Yahoo! News)
  • And overseas, the Bank of Japan's "Tanken" survey -- a measure of business confidence -- rose to 4 at the end of June from negative 8 in March. This was the first positive reading in the survey since September 2011. (CNNMoney)

5 Stocks We Were Watching Today :

  1. Weekly options traders foresee a new all-time high for Amazon.com (AMZN) over the next few trading sessions.
  2. Tesla Motors (TSLA) caught the attention of options players after rallying on the heels of a price-target increase.
  3. Bearish traders scooped up back-month put options as Facebook ( FB ) underperformed the broader market.
  4. As DISH Network (DISH) continued its exploration of multi-year-high territory, front-month call buyers descended.
  5. Up more than 42% in the past 52 weeks, Cisco Systems (CSCO) scored a price-target hike at Piper Jaffray.

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Positive economic data at home and abroad helped lift crude futures today, putting the commodity back on track after Friday's decline. At the close, August-dated oil was up $1.43, or 1.5%, to settle at $97.99 per barrel.

Gold prices also rose, bouncing back after suffering their worst-ever quarterly loss on record. Gold for August delivery stretched $32 higher today, adding 2.6% to close at $1,255.70 per 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: AMGN , FB , GMCR , INTC , UTX

Schaeffer's Investment Research

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