Stocks Little Changed as Slow News Day Draws the Focus to the Fed

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"Despite indexes being largely flat on the day, there were tons of stocks making big directional moves, both up and down," observed Schaeffer's Senior Trading Analyst Bryan Sapp. "This is an ideal environment for a trader, as there are tons of opportunities on both sides of the market." To kick off the week, the Dow Jones Industrial Average (DJI) spent time on both sides of the breakeven level -- and even notched another new all-time peak -- before settling modestly lower on the day.

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

plus...
  • Yahoo! ( YHOO ) bids for Tumblr, one Groupon ( GRPN ) call seller bets big, and Ford Motor ( F ) bulls place short-term bets.

The Dow Jones Industrial Average (DJI) traded as high as 15,391.84 (a new all-time peak) and as low as 15,314.15, ultimately settling off 19.1 points, or 0.1%, at 15,335.28. Eleven Dow members ended higher, led by Alcoa ( AA ), which gained 1.7%. McDonald's (MCD) was unchanged on the day, and the 18 laggards were paced by Merck (MRK), which lost 1.7%.

The S&P 500 Index (SPX) also finished in the red after rallying to a new all-time high of 1,672.84 in midday trading. At the closing bell, the SPX was off 1.2 points, or 0.1%, at 1,666.29. Technology stocks also lagged, as the Nasdaq Composite (COMP) gave back 2.5 points, or 0.1%, to end the session at 3,496.43. Not to be outdone by its index peers, however, the COMP also assailed new heights, inching to a 12-year high of 3,509.41 intraday.

The CBOE Market Volatility Index (VIX) bounced higher today, overcoming both its 10-day moving average and the 13 level. At the close, the fear barometer was up 0.6 point, or 4.6%, at 13.02.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"There weren't a lot of market-moving events today, but one thing that stood out to me was the massive sell-off and then reversal in silver," noted Sapp. "Last night, silver futures tanked on what many called a forced liquidation. Since then, futures completely reversed course and are currently up around 4%. Events like this can often signal further reversals, as many that were long silver last night likely got washed out of their positions."

3 Things to Know About Today's Market :

  • Yahoo! ( YHOO ) confirmed earlier rumors by agreeing to buy Tumblr for roughly $1.1 billion in cash. This is the largest deal YHOO has made since Marissa Mayer took over as CEO in July 2012. (ABC News)
  • In other merger news, generic drug maker Actavis Inc (ACT) is buying Warner Chilcott Plc (WCRX) for $5 billion in stock. ACT was rumored to be a buyout target itself, but this deal will help the company augment its profits as well as its arsenal of offerings. (Reuters)
  • Without any major earnings or economic reports to focus on, investors turned to the Federal Reserve, some members of which have begun to whisper about a slowing of the central bank's current bond-buying program. Following comments from some of his peers last week, Federal Reserve Bank of Dallas President Richard Fisher went on CNBC Monday to warn against the dangers of going "cold turkey" with the current quantitative easing policy. (CNBC)

5 Stocks We Were Watching Today :

  1. International Business Machines (IBM) has quietly become a favorite among bearish options speculators .
  2. One large-scale Groupon Inc ( GRPN ) speculator sold 10-strike calls, leaving ample room for upside over the next seven months.
  3. Put buyers pounced on Michael Kors Holdings (KORS), possibly to protect profits in the shares.
  4. Priceline.com (PCLN) drew another upgrade today, as the shares approached new 14-year-high territory.
  5. Short-term Ford Motor ( F ) bulls used weekly options to bet on continued upside.

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 :

Oil futures were on the rise again today, finishing in the black for the fourth consecutive session. Helped along by rising hopes for energy demand, June-dated crude added 69 cents, or 0.7%, to settle at $96.71 per barrel.

Gold enjoyed a solid day as well, breaking its seven-day losing streak. Gold for June delivery rose $19.40, or 1.4%, to end the day at $1,384.10 per ounce. One analyst chalked up the bounce higher to short-covering activity, which was spurred by gold's failure to breach its April low.

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: AA , F , FB , GRPN , YHOO

Schaeffer's Investment Research

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