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Upbeat Consumer Confidence Drives Blue Chips Higher

By: Schaeffer's Investment Research
Posted: 3/25/2014 4:24:00 PM
Referenced Stocks: FB;HIMX;GALT;ZNGA;IBM

"We definitely had a lot of volatility throughout the day and a mix of price action," observed Schaeffer's Senior Equity Analyst Joe Bell, CMT, of a trading day where the Dow Jones Industrial Average (DJI) explored a 128-point range but managed to stay in positive territory for the entire session. "But by the end of the session, the bulls gained traction and most of the major indexes finished in the green. Bigger picture, the market continues to be stuck in a volatile trading range after reaching new all-time highs back in early March."

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

Trading Topic of the Week -- Tips for Buying Weekly Options: Wait for the right setup . Weekly options offer plenty of advantages, but they aren't necessarily all-purpose trading vehicles.

The Dow Jones Industrial Average (DJI - 16,367.88) made headway today, adding 91.2 points, or 0.6%. Twenty-one of the Dow's 30 components moved higher, paced by International Business Machines Corp. ( IBM ) and Cisco Systems, Inc. (CSCO), both of which rose 3.6%. At the back of the pack was Nike Inc (NKE), down 1.6% today.

The S&P 500 Index (SPX - 1,865.62) made some brief stops in negative territory during Tuesday's session, but ultimately closed up 8.2 points, or 0.4%. Yesterday's laggard, the Nasdaq Composite (COMP - 4,234.27) , posted a minor gain of 7.9 points, or 0.2%, in today's action.

The CBOE Volatility Index (VIX - 14.02) took a tumble as stocks bounced back from Monday's decline. The "fear barometer" settled the day with a loss of 1.1 points, or 7.1%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Despite the midday selling, the major indexes were able to hold their March lows and withstand the selling pressure once again," noted Bell. "There has been a lot of rotation between sectors recently, as small-caps and mid-caps continue to lag."

5 Items on Our Radar Today :

  1. Leaders from the G-8 convened in The Hague without Russian President Vladimir Putin in order to send a symbolic message that his annexation of Crimea was unacceptable. In a joint statement, the heads of state also threatened to impose harsher sanctions if Russia shows additional signs of aggression. President Obama and leaders from Canada and Europe's four leading economies also said they would sit out the June G-8 meeting planned in Russia and would instead gather in Brussels. Russia has been a member of the G-8 -- a forum for the world's leading industrialized economies -- since 1998. (The New York Times)
  2. The rate of new home sales slipped 3.3% in February to reach a five-month low and fall short of economists' expectations. Meanwhile, the S&P/Case-Shiller home price index -- which gauges prices in 20 major metro areas -- ticked 0.8% higher in January (on a seasonally adjusted basis). During the past 12 months, home prices have risen 13.2%. While the monthly reading narrowly topped economists' outlook , the year-over-year results narrowly missed the consensus forecast. (USA Today; Reuters)
  3. A measure of consumer confidence spiked to 82.3 this month, per the Conference Board, advancing from 78.3 in February. The figure topped economists' estimates and notched its highest reading since January 2008. (Los Angeles Times)
  4. Option traders bet on a Zynga Inc ( ZNGA ) pullback in the lead-up to tomorrow's IPO of rival King Digital Entertainment Plc.
  5. Rallying Sprint Corporation (S) received a bullish brokerage note this morning -- and more could be on the way.

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 :

Oil futures drifted lower on Tuesday, amid expectations that tomorrow's inventories report will reveal a boost in crude supplies. The May contract slipped 41 cents, or 0.4%, to settle at $99.19 per barrel.

Gold futures managed to tick higher, as the metal traded around the psychologically significant $1,300-an-ounce mark ahead of tomorrow's expiration of the April contact. By the close, the soon-to-expire contract had added 20 cents to close at $1,311.40 an ounce.

SCHAEFFER'S MARKET POSTURE