"Well, well, well ... the bulls came back with a vengeance today," chuckled Schaeffer's Senior Technical Strategist Ryan Detrick, CMT, of a day which saw the Dow Jones Industrial Average (DJI) gain 323 points and retake the 15,000 level. "All it took was some hope that a short-term debt limit increase could be in the cards to allow more time to work through budget negotiations (which, incidentally, they've had two years to work on). Nonetheless, the market took this as great news. Sure, the government is closed, but that was never really the issue. The big concern the whole time has been the debt ceiling. The market hates uncertainty, and this 'kick the can' approach has removed some of that."
Continue reading for more on today's market, including :
- Apple Inc. ( AAPL ) option bulls eyed the hard-to-get $500 level .
- Put buyers circled Groupon ( GRPN ) ahead of earnings .
- This week's Option Trends breaks down notable call and put activity on three well-known tech companies .
- The nation's leaders promise to get down to business -- following stern words from Treasury Secretary Jack Lew -- and Netflix ( NFLX ) gets a boost.
The Dow Jones Industrial Average (DJI - 15,126.07) popped higher out of the gate and continued to gain ground all the way through the closing bell, where it settled at its intraday high. The blue-chip index added 323.1 points, or 2.2%, and moved back above the 15,000 mark following three consecutive closes below this key level. All 30 Dow names closed in the black, but Boeing ( BA ) was the top performer, rallying 3.9% on the day. At the back of the pack was Chevron ( CVX ), which logged a modest gain of 0.2%.
The S&P 500 Index (SPX - 1,692.56) also finished at its intraday high-water mark, adding 36.2 points, or 2.2%, to retake its 80-day moving average. The Nasdaq Composite (COMP - 3,760.75) ended the session just shy of its respective intraday peak, but still posted a gain of 83 points, or 2.3%.
Conversely, the CBOE Market Volatility Index (VIX - 16.48) tumbled sharply at the outset, closing with a loss of 3.1 points, or 15.9%. The market's fear gauge is solidly below its 10-day moving average for the first time since Sept. 20.
A Trader's Take :
"As dour as things looked these last few days, just like that ... the S&P 500 Index (SPX) has a real shot at closing in the black for the week," noted Detrick. "Now one thing to remember is that big up days historically happen in bear markets, so that is something to think about here. Any bad news tomorrow could change everything, and in a hurry, so be on your toes as we head into the weekend."
3 Things to Know About Today's Market :
- There were signs of forward momentum in Washington today, as House Speaker John Boehner, R-Ohio, proposed a temporary debt-ceiling hike on behalf of his party, in exchange for budget negotiations. Talks will take place at the White House later this afternoon, as the two parties are scheduled to convene shortly after 4:30 p.m. ET. (Bloomberg Businessweek)
- Treasury Secretary Jack Lew testified before the Senate Finance Committee this morning, warning of the "potentially catastrophic impacts" of a default, should lawmakers not forge a mutually agreeable solution ahead of the Oct. 17 debt-ceiling deadline. Lew reiterated President Obama's refusal to discuss certain budget items until the government shutdown is lifted and the debt ceiling raised. (New York Daily News)
- Initial jobless claims tagged a six-month high of 374,000 last week (on a seasonally adjusted basis), as gridlock in Washington had a trickle-down effect outside of the federal sector. Also impacting the figure was a continued technical glitch in California -- the state solely accounted for about half of last week's 66,000 new claims. Excluding these extenuating factors, claims rose to roughly 325,000. (Reuters)
5 Stocks We Were Watching Today :
- A bullish brokerage note helped Netflix ( NFLX ) reclaim the $300 mark.
- Put buyers circled Groupon ( GRPN ) ahead of earnings.
- Option bulls pounced on DryShips Inc. (DRYS) , looking for short-term gains.
- Advanced Micro Devices (AMD) short sellers may be picking up January-dated calls for intermediate-term protection.
- Activity in the Google (GOOG) options pits heated up, with the primary focus on very short-term puts.
For a look at today's options movers and commodities activity, head to page 2.
Oil prices bounced back from Wednesday's decline, after the Organization of the Petroleum Exporting Countries (OPEC) disclosed a drop in output, and tensions flared in the Middle East. By the close, oil futures for November delivery had gained $1.40, or 1.4%, to settle at $103.01 per barrel.
Gold futures, however, retreated lower as the rally in equities lessened the appeal of the yellow metal. December-dated gold lost $10.30, or 0.8%, to settle at $1,296.90 an ounce, the contract's first close south of $1,300 since Oct. 1.
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