"Not much has happened, but it sure feels like we're moving,"
observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT.
"Recent volatility continued today. A big up day, then a big drop
yesterday, then a nice rally today before closing only slightly
higher. After such a steady uptrend to kick off the year,
volatility is finally coming back." Today, the
Dow Jones Industrial Average (DJI)
shook off some of yesterday's declines, gaining ground after
lackluster economic data tempered concerns that the Federal Reserve
would be quick to halt its bond-buying efforts.
Continue reading for more on today's market, including
The latest GDP figure, a bold move from DISH Network (
), and increased bearish speculation on Groupon (GRPN).
Dow Jones Industrial Average (DJI)
spiked into the green shortly after the open, and hit an intraday
peak of 15,398.70 (a gain of 96 points). By the close, however, the
index had given back much of these gains, and was up just 21.7
points, or 0.1%, at 15,324.53, a hair below its 10-day moving
average. Still, 17 of the Dow's 30 members were higher on the day,
led by Bank of America (BAC), which rallied 2.6%. Pacing the
declining minority was Walt Disney (DIS), which dropped 2.4%
S&P 500 Index (SPX)
also surrendered most of its earlier gains to close just shy of its
respective 10-day trendline. The SPX ended 6.1 points, or 0.4%,
higher at 1,654.41. Besting its two major index peers was the
Nasdaq Composite (COMP)
, which held on to 23.8 points, or 0.7%, to close at 3,491.30,
north of its 10-day trendline.
CBOE Market Volatility Index (VIX)
took a step back after two days in positive territory. By the
close, the fear barometer had dropped 0.3 point, or 2%, to settle
A Trader's Take
"I've been very impressed with the M&A activity recently,"
Detrick said. "Yesterday a Chinese firm bought out pork giant
Smithfield Foods (SFD) for a 25% premium, then today Warren Buffett
scooped up utility NV Energy (NVE) at a 23% premium. Sure, we're at
all-time highs, but these are signs companies have cash, think
there are still deals out there, and most importantly, show
confidence is coming back. You don't have multi-billion dollar
deals on consecutive days without confidence. Lastly," he
continued, "check out banks. They held up well yesterday and were a
sign the drop might be short-lived. Few groups are as economically
sensitive as banks. To see so many banks breaking out to new highs
is a very nice sign for the overall economy going out six
3 Things to Know About Today's Market
- The U.S. first-quarter gross domestic product (GDP)
, falling fractionally shy of the 2.5% gain projected last month.
Excluding inventories, GDP rose 1.8%, narrowly outpacing the
- The number of people filing for first-time unemployment
rose by more than expected last week
, gaining 10,000 over the previous week to a seasonally adjusted
354,000. Analysts were expecting roughly 340,000 initial claims.
Elsewhere, the seasonally adjusted
pending home sales index
-- released by the National Association of Realtors -- rose 0.3%
last month to 106. While this marked the highest reading in three
years, it failed to live up to economists' expectations.
(Los Angeles Times, Chicago Tribune)
- As Clearwire Corporation (
) shareholders prepared to vote on an existing buyout offer from
Sprint Nextel (
DISH Network (
) swooped in
and made things a lot more interesting. The DISH bid of $4.40 per
share is nearly 30% higher than Sprint's offer of $3.40 per
share. CLWR shareholders have now delayed the vote, which was
scheduled for Friday.
5 Stocks We Were Watching Today
- General Electric (GE) was targeted by option bulls hoping for
a short-term breakout to
new annual highs
- Straddle buyers think a
big move is in the cards
for Bank of America Corp (BAC), which has already gained 90% over
the past year.
Put volume spiked
in Groupon Inc (GRPN) option pits, as speculators wagered on a
- Clearwire Corporation (
) was upgraded by Raymond James after receiving a new
surprise buyout offer
- EMC Corporation (EMC) announced a quarterly dividend, and
short-term call buyers
For a look at today's options movers and commodities
activity, head to page 2.
Crude supplies rose to a record high last week, up 3 million
barrels to 397.6 million, according to the National Energy
Information Administration. Nevertheless, oil prices rose on the
day, with July-dated futures adding 48 cents, or 0.5%, to settle at
$93.61 per barrel.
It was a positive day for gold, as well, which topped the 1,400
mark to settle at a two-week high. Disappointing domestic economic
data helped drive August-dated gold up $20.20, or 1.5%, to $1,412
per ounce. This was the highest close for a most-active contract
since May 14.
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