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Dow Jones Industrial Average Defeats 17K on Jobs Boost

The unemployment rate is approaching six-year lows

by 7/3/2014 1:30:31 PM
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U.S. stocks rocketed higher out of the gate this morning, as Wall Street applauded a stronger-than-expected nonfarm payrolls report for June. The Dow Jones Industrial Average (DJI) conquered the formerly elusive 17,000 level in short order, and the S&P 500 Index (SPX) is quickly approaching its own round-number target at 2,000. Against this backdrop, both barometers settled the holiday-shortened session at record closing highs.

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

  • Ahead of the unofficial start to earnings season next week, how are option traders gambling on Alcoa Inc (NYSE:AA)?
  • Lululemon Athletica inc. (NASDAQ:LULU) and PACCAR Inc (NASDAQ:PCAR) both reacted to buyout buzz.
  • Chart to Watch: Keurig Green Mountain Inc (NASDAQ:GMCR) is dancing with new highs.
  • Plus ... The unemployment rate nears a six-year low, business activity dips from a nine-month high, and Cisco Systems, Inc. (NASDAQ:CSCO) calls were hot commodities.
Trading Topic of the Week -- Ways to Win with Aggressive Trades: Keep holding periods brief. This is one scenario where patience isn't a virtue -- to preserve capital, act quickly to shut down underperforming trades.

The Dow Jones Industrial Average (DJI - 17,068.26) hit a milestone today, topping 17,000 for the first time ever. The blue-chip index touched an all-time peak of 17,074.65 in intraday action, and settled the holiday-shortened session with a gain of 92 points, or 0.5%. Just three of the Dow's 30 components ended lower, with Johnson & Johnson (NYSE:JNJ) leading the laggards with a 0.4% drop. Goldman Sachs Group Inc (NYSE:GS), meanwhile, paced the advancing majority, tacking on 1.5%. Since last Friday, the Dow has added 1.3%.

The S&P 500 Index (SPX - 1,985.44) extended its quest for record highs, as well, tacking on 10.8 points, or 0.6%, after peaking at 1,985.59. The Nasdaq Composite (COMP - 4,485.93) remained in beast mode, extending its winning streak to seven sessions, and adding 28.2 points, or 0.6%, to settle at a fresh 14-year high. Since last Friday, the SPX and COMP have advanced 1.2% and 2%, respectively.

On the flip side, the CBOE Volatility Index (VIX - 10.32) gave up 0.5 point, or 4.6%, in the wake of a solid payrolls report. What's more, the "fear gauge" touched a seven-plus-year low of 10.28 in the final hour of the abbreviated session. Week-to-date, the VIX has surrendered 8.3%.



5 Items on Our Radar Today:

  1. The U.S. economy created 288,000 jobs in June, marking the fifth consecutive month of gains -- the hottest streak since 1999. Meanwhile, the unemployment rate dropped to a near-six-year low of 6.1% from 6.3% in May. (MarketWatch)
  2. Meanwhile, the Institute for Supply Management's (ISM) service-sector index fell to 56.0 in June from a nine-month high of 56.3 in May, suggesting a slowdown in business activity. The drop was unexpected, as economists were calling for the index to remain unchanged. (Reuters, via CNBC)
  3. Business growth also slowed in the eurozone last month, as Markit's final purchasing managers index (PMI) for the currency bloc fell to 52.8 from 53.5 in May. France was hit particularly hard, as business activity shrank at the fastest pace in four months. (Reuters)
  4. CSCO call options flew off the shelves today.
  5. Micron Technology, Inc. (NASDAQ:MU), on the other hand, attracted a fresh crop of option bears.
  6. For a look at today's options movers and commodities activity, head to page 2.

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