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Dow Continues Higher, Ends the Week in the Green

Crude settles week 2.5% higher, crosses the $100 threshold in intraday trading

by 2/7/2014 4:19:16 PM
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"The jobs number came in much worse than expected, and it seemed like everyone felt the market could do nothing but go straight down," reported Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Well, after a brief sell-off before the market opened, the bulls bought the dip and yesterday's momentum continued in a big way to the upside." The Dow Jones Industrial Average (DJI) continued to fight its way into the green, closing with another triple-digit gain and finishing in positive territory for the week.

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

  • A look at the week's biggest market news, in seven short bullets.
  • Where have all the bulls gone? Schaeffer's contributor Adam Warner has one theory.
  • Is the worst yet to come for beleaguered J.C. Penney Company, Inc. (NYSE:JCP) shares? Some put buyers seem to think so.
  • Plus ... the monthly jobs report disappoints, a Federal Reserve official takes to the airwaves, and one Intel (NASDAQ:INTC) bull placed a half-a-million-dollar bet.
Trading Topic of the Week -- Reasons to Dodge Directional Risk: Reduce your reliance on stop-losses. With straddles, your dual directional exposure means you won't suffer major initial losses due to market volatility or adverse price movement.

The Dow Jones Industrial Average (DJI - 15,794.08) spent nearly all of today's session marching higher, ending with a gain of 165.6 points, or 1.1%, a chip-shot away from its intraday peak. On a weekly basis, the blue-chip index managed a 0.6% gain. All but one of the Dow's members advanced today, with The Boeing Company's (NYSE:BA) 3.6% gain leading the charge. The lone laggard was The Coca-Cola Company (NYSE:KO), down 0.2%.

The S&P 500 Index (SPX - 1,797.02) finished just shy of the round-number 1,800 mark, surging 23.6 points, or 1.3%, on the day. The Nasdaq Composite (COMP - 4,125.86) also advanced, adding 68.7 points, or 1.7%. The SPX rose 0.8% week-over-week, while the COMP moved up 0.5%.

The CBOE Volatility Index (VIX - 15.29) gave back 1.9 points, or 11.3%, and ended the week with a 16.9% deficit.



A Trader's Take:

"The strength in the dollar relative to the yen is getting a lot of attention recently, and once again corresponded with today's strength after the jobs report," noted Bell. "The cyclical sectors took a leadership role today, with technology and industrials sporting large gains."

5 Items on Our Radar Today:

  1. The U.S. labor force grew by 113,000 jobs last month, falling notably short of economists' estimates. The unemployment rate dropped to a five-year low of 6.6%, and is well off its post-recession high of 10%, which was hit in October 2009. (Chicago Tribune)
  2. Dallas Fed President Richard Fisher appeared on CNBC to quell the notion that the jobs number is the only data point being monitored as the central bank makes further tapering decisions. "The real question is momentum in the economy," he noted, "and it has been picking up." (CNBC)
  3. One large-scale speculator scooped up a massive block of Intel Corporation (NASDAQ:INTC) calls, wagering on a return to historical highs.
  4. Yelp Inc (NYSE:YELP) options players are looking for a move up to the never-explored $100 level.
  5. Our Option Idea of the Week highlights why Canadian Solar Inc. (NASDAQ:CSIQ) shares could have more gas in the tank, even after the stellar year they've had.

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

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