Stocks Power Higher as Yellen, Tech Earnings Fuel the Bulls


"Overall, today's rally was nice for a market that's been absent much strength lately," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "The S&P 500 Index (SPX) is now back above the 1,840 area, and small-caps and tech stocks are leading the way. Although we've seen nice momentum, investors will be looking for some continuation as the holiday-shortened week comes to a close tomorrow." After spending most of the session with a triple-digit gain, the Dow Jones Industrial Average (DJI) settled at its intraday peak, extending its winning streak to three sessions.

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The Dow Jones Industrial Average (DJI - 16,424.85) skyrocketed out of the gate, and ultimately settled at its highest point of the session, adding 162.3 points, or 1%. All but four of the Dow's 30 components ended in the black, led by Visa Inc's (V) 2.6% gain. UnitedHealth Group Inc. (UNH) paced the three decliners, shedding 1.7%, while McDonald's Corporation (MCD) finished flat.

The S&P 500 Index (SPX - 1,862.31) also ended at its intraday acme, advancing 19.3 points, or 1.1%, by the close. Not to be outdone, the tech-rich Nasdaq Composite (COMP - 4,086.23) fared the best of its peers, rallying 52.1 points, or 1.3%, to finish within a chip-shot of its session high.

The CBOE Volatility Index (VIX - 14.18) declined for a third straight session, giving up 1.4 points, or 9.2%, by the close.



A Trader's Take :

"Last night, big tech stocks like YHOO and INTC reported earnings, and China issued its gross domestic product report," added Bell. "China's economic news met expectations, and overall the tech sector showed outperformance today. While semiconductor stocks were notable laggards, the biotechnology sector did the heavy lifting today."

5 Items on Our Radar Today :

  1. Yahoo! Inc. ( YHOO ) reported first-quarter earnings and revenue that were better than analysts' projections. For the first time in four quarters, the company secured an increase in some key revenue areas. Traders also paid special attention to last night's report, as it offered a clue into Alibaba , of which Yahoo! owns a hefty 24% stake. The Chinese e-commerce concern -- which is preparing for its initial public offering (IPO) -- booked a fiscal fourth-quarter profit of $1.4 billion, more than doubling the previous year's results. (The Washington Post; The New York Times)
  2. In a speech to the Economic Club of New York, Fed Chair Janet Yellen opined that the U.S. economy could meet the central bank's employment and inflation targets by the end of 2016. However, she noted that the risk of high inflation remains "significantly below the chances of inflation persisting below 2%," and said the Fed doesn't want to tighten monetary policy too soon, which could be "very costly to reverse." Meanwhile, the Fed's Beige Book suggested economic activity improved in most of the country from Feb. 24 to April 7, as harsh winter weather tapered off. (USA Today; MarketWatch)
  3. Housing starts increased by 2.8% last month , with notable demand for single-family homes as the unseasonably frigid winter drew to a close. Builders began construction on 946,000 homes during March, falling short of economists' estimates. Applications for permits, meanwhile, dropped 2.4% in March. (AP, via ABC News)
  4. Put buyers wagered on a post-earnings letdown from Starbucks Corporation (SBUX) , which recently breached a significant trendline on the charts.
  5. Intel Corporation ( INTC ) scored a number of brokerage upgrades following its well received first-quarter earnings report.


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



Commodities :

Oil futures finished slightly higher, as escalating tensions between Russia and Ukraine overshadowed a steeper-than-expected rise in weekly inventories. By the close, the May-dated contract added a penny to settle at $103.76 per barrel.

Meanwhile, accommodative comments from Fed Chair Janet Yellen helped June-dated gold advance $3.20, or 0.3%, to end at $1,303.50 an ounce.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing , Options

Referenced Stocks: HLF , GM , GE , YHOO , INTC

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