"The European Central Bank's (ECB) decision to cut rates seemed to push the market higher today," noted Schaeffer's Trading Analyst Peter Bryans. "Stocks were in the black across the board, and the S&P 500 Index (SPX) scored another all-time closing high." In the same vein, the Dow Jones Industrial Average (DJI) settled at a record peak, tacking on 99 points by the closing bell.
Continue reading for more on today's market, including
- The latest publicity plaguing General Motors Company ( GM ) -- in the wake of very public recalls -- did little to dissuade one optimistic speculator .
- Zynga Inc ( ZNGA ) landed on the short-sale restricted list , but option players remained upbeat.
- Ahead of its 7-for-1 stock split -- and in the wake of another round of upbeat analyst attention -- Apple Inc. ( AAPL ) extended its quest for new highs .
- Plus ... The ECB's unprecedented move, jobless claims tick higher, and Tesla Motors Inc ( TSLA ) option traders eye more upside.
Trading Topic of the Week -- Trading Low-Priced Options DON'T short-change yourself on time . Compared to a front-month contract, an option with six months of shelf life offers more time for the shares to move as you expect. This extra time provides you a little breathing room to allow the predicted price move to play out.
The Dow Jones Industrial Average (DJI - 16,836.11) spent nearly all of Thursday's session in positive territory, hitting a new all-time intraday peak of 16,845.81 and closing at a new high as well, up 98.6 points, or 0.6%. All but three of the blue-chip index's components ended the day higher, led by Caterpillar Inc.'s ( CAT ) 2.5% jump. UnitedHealth Group Inc. (UNH) settled at the back of the pack, down 0.9%.
Also tagging fresh intraday and closing highs was the S&P 500 Index (SPX - 1,940.46) , which registered its highest-ever reading of 1,941.74 before closing just south of this mark, up 12.6 points, or 0.7%. The Nasdaq Composite (COMP - 4,296.23) rallied as well, gaining 44.6 points, or 1.1%.
The CBOE Volatility Index (VIX - 11.68) dipped back below the 12 mark, losing 0.4 point, or 3.3%, on the day.
A Trader's Take
"Small-caps were the leaders once again, as the iShares Russell 2000 Index (IWM) seems to be making a sustained breakout from its downtrend that began in early March," added Bryans. "It was a 'risk-on' day, with many of the high-beta names in the Nasdaq also leading the large-cap S&P and Dow components. As always -- from a trader's perspective -- we will be waiting to see how the market reacts to the nonfarm payrolls data tomorrow, and not focusing on whether it's a 'good' or 'bad' number."
5 Items on Our Radar Today
- In a move many are saying is "radical," the ECB lowered its deposit rate below zero (to -0.10%) and cut its benchmark rate to 0.15% from 0.25%. This marks the first time the deposit rate has been negative, which effectively means banks in the region will be charged in order to maintain their reserves. These measures are being implemented to help the eurozone stave off deflation. In a press conference following the event, ECB President Mario Draghi discussed a plan to offer long-term loans at lowered rates for the next four years. (USA Today )
- In the wake of the ignition-switch recall that may have played a role in 13 (and possibly more) fatalities, 15 GM executives and engineers were terminated by company CEO Mary Barra. Speaking before company employees, Barra noted that "the attitudes and practices that allowed this failure to occur will not be tolerated ... our job must be to set a new industry standard for safety, quality, and excellence." (Los Angeles Times)
- Weekly jobless claims rose by 8,000 during the week ended May 31, to a seasonally adjusted 312,000. This was slightly north of economists' estimates. The four-week moving average, however, dipped by 2,250 to 310,250, its lowest point in nearly seven years. (FOX Business)
- Option buyers wagered on Tesla Motors Inc ( TSLA ) to zoom higher next week.
- General Electric Company (GE) bulls took advantage of relatively inexpensive short-term option premiums.
For a look at today's options movers and commodities activity, head to page 2.
Crude futures finished lower again today, as the dollar gained ground in the wake of the European Central Bank (ECB) rate cut. By the time the dust settled, oil for July delivery dipped 16 cents, or 0.2%, to $102.48 per barrel.
Gold futures notched their biggest single-session advance since mid-May, thanks to the prospect of long-term stimulus measures from the ECB. By the close, the August contract surged $9, or 0.7%, to $1,253.30 an ounce.
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