Real-Time Market Insights
Hot Stock News for Options Traders

Blue Chips Lead, Tech Lags, as Momentum Names Retreat

Oil surges back above $100, while gold dips south of $1,300

by 5/7/2014 4:21:17 PM
Stocks quoted in this article:

"In another day of mixed price action, we saw large-caps show some strength, while small-caps and technology stocks once again failed to impress," summarized Schaeffer's Senior Equity Analyst Joe Bell, CMT. "This rotation has been the story of 2014 so far, and the trend continued into today." While the tech sector struggled, the Dow Jones Industrial Average (DJI) spent the majority of the day in the green, closing with a triple-digit gain and just off its intraday peak.

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

Trading Topic of the Week -- Ways to Win with Aggressive Trades: Stay open to both bullish and bearish setups. Thanks to the flexibility of options, you can reap leveraged profits even when the market is in sell-off mode.

The Dow Jones Industrial Average (DJI - 16,518.54) bounced higher today, reversing nearly all of yesterday's deficit to close up 117.5 points, or 0.7%. The Dow's 25 advancers were led by UnitedHealth Group Inc. (NYSE:UNH), which rose 3.5%. Merck & Co., Inc. (NYSE:MRK) paced the declining faction yet again, dropping 2.2% on the day.

The S&P 500 Index (SPX - 1,878.21) advanced as well, rising 10.5 points, or 0.6%, to put the 1,880 level back in play. The Nasdaq Composite (COMP - 4,067.67), on the other hand, was dragged into the red, losing 13.1 points, or 0.3%.

After two positive closes in a row, the CBOE Volatility Index (VIX - 13.40) lost some ground today, giving back 0.4 point, or 2.8%, to close just shy of its intraday low.

CLOSING SUMMARY  INDICES

CLOSING SUMMARY  NYSE AND NASDAQ

A Trader's Take:

"With the Ukraine situation continuing to hover in the background, Janet Yellen took the stage this morning to face Congress on the state of the U.S. economy and Fed actions," noted Bell. "There was nothing terribly market-moving as a result, as most investors continue to focus on earnings season."

5 Items on Our Radar Today:

  1. In prepared remarks before the Joint Economic Committee, Federal Reserve Chair Janet Yellen expressed cautious optimism for U.S. economic growth in 2014, despite a slowdown in the housing market that could be "more protracted" than initial estimates. Yellen also failed to nail down a timeline for looming interest-rate hikes, and said the central bank's asset-buying efforts remained on schedule to end by the fall. (USA Today)
  2. U.S. nonfarm productivity dipped at its fastest rate in a year during the first quarter, falling short of economists' estimates. Against this backdrop, unit labor costs spiked by the broadest margin since the fourth quarter of 2012, outpacing expectations. (Reuters, via CNBC)
  3. After Tuesday's close, Alibaba Group -- potentially the world's largest e-commerce company -- officially filed its paperwork for an initial public offering (IPO) in the States. The company is hoping to raise at least $1 billion through the IPO, which would rank it among the largest in U.S. history. (Associated Press, via Yahoo! Finance)
  4. A number of analysts swatted Groupon Inc (NASDAQ:GRPN) with downgrades after the company's disappointing turn in the earnings confessional.
  5. A far-sighted bearish trader executed a long put spread in Caterpillar Inc. (NYSE:CAT) option pits today.
EARNINGS

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

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