Stocks Muscle Higher as Earnings Season Heats Up

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"Earnings season really heated up today, with a lot of big names reporting. For the most part, the results were pretty good," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "We were also greeted with a decent GDP number for the fourth quarter, and we made up most of yesterday's losses." The Dow Jones Industrial Average (DJI) bounced 110 points higher today, recovering more than half of Wednesday's decline.

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

Trading Topic of the Week -- Tips for Short-Term Trading: Select your option carefully. Consider your risk appetite and forecast for the stock when choosing a strike and expiration date, since there's no room for error when your trading time frame can be measured in hours.

Aside from a brief blip into negative territory, the Dow Jones Industrial Average (DJI - 15,848.61) traded above breakeven for the session, closing with a gain of 109.8 points, or 0.7%, erasing much of yesterday's 190-point deficit. Nike Inc ( NKE ) paced the Dow's 25 advancing stocks with a gain of 3%, while The Boeing Company ( BA ) again brought up the rear, dropping 2.5% on the day.

The S&P 500 Index (SPX - 1,794.19) reversed yesterday's losses -- and then some -- and inched into positive territory for the week. By the close, the SPX had added 20 points, or 1.1%. Elsewhere, the Nasdaq Composite (COMP - 4,123.13) also undid Wednesday's pullback, settling on a gain of 71.7 points, or 1.8%.


The CBOE Volatility Index (VIX - 17.29) managed to hold above the 17 level, giving back 0.1 point, or 0.4%, by the close.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"After all the turmoil with emerging markets and international currencies, market volatility has certainly picked up without much directional movement so far this week," Bell added. "Major market indexes sit just above their December 2013 lows, but we are starting to see signs of significant short-term pessimism surrounding this market. These are similar fears that characterized most pullbacks that occurred during the bull market over the past couple of years. "

5 Items on Our Radar Today :

  1. Strength in the mobile advertising department helped carry Facebook Inc ( FB ) fourth-quarter earnings and sales well above analysts' expectations. The stock rallied into uncharted territory in response. (CNBC)
  2. U.S. gross domestic product (GDP) expanded at a seasonally adjusted annual pace of 3.2% during the fourth quarter of 2013, the Commerce Department reported. The reading, which was bolstered by robust consumer spending, was in line with economists' estimates. Elsewhere, pending home sales plunged in December -- hitting their lowest point since October 2011 -- amid historically cold temperatures. Year-over-year, the reading slipped almost 9%. (Reuters; Los Angeles Times)
  3. Tesla Motors Inc ( TSLA ) speculators scooped up eleventh-hour bets ahead of remarks from CEO Elon Musk.
  4. A broad rally in the social media sector sent Twitter Inc (TWTR) solidly higher, prompting some weekly call buying activity.
  5. Following its fiscal first-quarter earnings report, QUALCOMM, Inc. (QCOM) attracted positive brokerage attention, including two price-target hikes.

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 futures rose to a year-to-date high, as investors were cheered by the latest GDP reading. By the close, March crude futures had added 87 cents, or 0.9%, to rest at $98.23 per barrel.

Conversely, gold prices spiraled lower amid rising stocks and a stronger dollar. Gold for April delivery dropped $19.70, or 1.6%, to settle at $1,242.50 an 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: BA , FB , GOOG , NKE , TSLA

Schaeffer's Investment Research

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