Stocks Make Headway on Bland Economic News

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"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 :

plus...
    The latest GDP figure, a bold move from DISH Network ( DISH ), and increased bearish speculation on Groupon (GRPN).

The 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% today.

The 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.

The 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 at 14.53.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

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 months."

3 Things to Know About Today's Market :

  • The U.S. first-quarter gross domestic product (GDP) increased 2.4% , falling fractionally shy of the 2.5% gain projected last month. Excluding inventories, GDP rose 1.8%, narrowly outpacing the consensus view. (Reuters)
  • The number of people filing for first-time unemployment benefits 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 ( CLWR ) shareholders prepared to vote on an existing buyout offer from Sprint Nextel ( S ), DISH Network ( DISH ) 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. (FOX Business)

5 Stocks We Were Watching Today :

  1. General Electric (GE) was targeted by option bulls hoping for a short-term breakout to new annual highs .
  2. 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.
  3. Put volume spiked in Groupon Inc (GRPN) option pits, as speculators wagered on a short-term pullback.
  4. Clearwire Corporation ( CLWR ) was upgraded by Raymond James after receiving a new surprise buyout offer .
  5. EMC Corporation (EMC) announced a quarterly dividend, and short-term call buyers took notice.

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 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.

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: CLSN , CLWR , DISH , S , WLT

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