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Dow Outperforms in Choppy Trading Day

By: Schaeffer's Investment Research
Posted: 6/3/2013 4:21:00 PM
Referenced Stocks: AAPL;BBRY;DE;INTC;MRK

"Trading was mixed today, as home builders and consumer discretionary issues performed poorly, while commodities and energy led," summarized Schaeffer's Senior Equity Analyst Joe Bell, CMT, of a session where the Dow Jones Industrial Average (DJI) fared the best of the broader-market indexes. "The ISM Manufacturing Index fell more than expected -- showing its first contraction since November 2012 and lowest reading since June 2009. Various sectors had conflicting reactions to this news."

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

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The Dow Jones Industrial Average (DJI) started in the green and continued to power higher throughout the trading session, finishing the day just a chip-shot shy of its intraday peak. By the close, the blue-chip index was up 138 points, or 0.9%, at 15,254.03, but still below its 10-day moving average. Today's rally was broad across the Dow, as 28 of 30 components moved higher, led by Intel ( INTC ) and Merck ( MRK ), which respectively gained 4% and 3.8%. The two decliners were Bank of America (BAC) and JPMorgan Chase (JPM), down 0.8% and 0.2%, respectively.

Gains were not as robust for the S&P 500 Index (SPX) , which added 9.7 points, or 0.6%, today, to settle at 1,640.42. The Nasdaq Composite (COMP) was the laggard of the day, muscling 9.5 points, or 0.3%, higher, to end the session at 3,465.37. Both the SPX and the COMP closed near their intraday highs, but both remain below their respective 10-day moving averages.

After a notable gain on Friday, the CBOE Market Volatility Index (VIX) drifted fractionally lower today. The VIX gave back less than 0.1 point, or 0.1%, to settle at 16.28.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The Dow's performance was the real bright spot today," added Bell. "Since it's a price-weighted index, the extremely strong day from Merck ( MRK ) bolstered the index well above its counterparts. The drugmaker was higher following positive results in one of its trials."

3 Things to Know About Today's Market :

5 Stocks We Were Watching Today :

  1. Research In Motion Ltd ( BBRY ) calls were in high demand today ahead of the U.S. launch of the Q10 smartphone.
  2. Pandora Media Inc (P) dropped almost 11% on the Apple streaming-music rumors , but one trader made a hopeful short-term bet.
  3. Conservative bullish traders bought a bull call spread in Ciena Corporation (CIEN) ahead of the company's earnings report.
  4. LinkedIn Corp (LNKD) was given a new "outperform" rating -- and a price target of $220 -- but still drifted into the red.
  5. Facebook Inc (FB) back-month puts were in focus today, as the stock continued its recent slide .

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 :

The U.S. dollar was pressured lower following weaker-than-expected manufacturing data, and this helped send crude oil to a higher finish. July-dated oil futures rose $1.48 today, or 1.6%, to settle at $93.45 per barrel. This move was not quite enough to pare Friday's losses in the commodity.

Gold futures also gained ground, as investors grew less concerned of a near-term end to the Federal Reserve's bond-buying efforts. At the close, August gold was sitting $18.90, or 1.4% higher, at $1,411.90 an ounce.

SCHAEFFER'S MARKET POSTURE