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Hot Stock News for Options Traders

Dow Jones Industrial Average Ekes Out a Win; Gold Reclaims $1,300

June's trade deficit shrank by a wider-than-expected margin

by 8/6/2014 4:24:31 PM
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The Dow Jones Industrial Average (DJI) posted modest gains today, with Wall Street catching its collective breath following Tuesday's triple-digit drop. The blue-chip barometer spent time on both sides of breakeven, as traders digested a handful of M&A developments and a declining trade deficit -- all while keeping a close eye trained on the escalating conflict between Russia and Ukraine. By the close, though, the DJI had tacked on a modest 14 points.

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

  • 3 of the worst stocks for August.
  • A quick lesson in how long-term options can be used as an alternative to purchasing stock, courtesy of one American International Group Inc (NYSE:AIG) trader.
  • 2 ways option players are trading puts amid Herbalife Ltd.'s (NYSE:HLF) technical troubles.
  • Plus ... NATO weighs in on Russia, the trade deficit narrows, and a pair of high-profile buyout bids fall apart.
Trading Topic of the Week -- Trading Stock Trends: Don't be afraid to buy plenty of time. When you're playing trends, go ahead and spring for that longer-term option. You'll be buying valuable time for the expected stock move to play out in full.

The Dow Jones Industrial Average (DJI - 16,443.34) traded in a 118-point range today, before eventually closing up a modest 13.9 points, or 0.1%, as 18 of the Dow's 30 components finished in the green. The Procter & Gamble Company (NYSE:PG) led the charge with a 2.1% pop, while The Boeing Company's (NYSE:BA) 1.8% drop paced the decliners.

The S&P 500 Index (SPX - 1,920.24) spent time on both sides of breakeven today, before eventually settling fractionally higher. It was a similar set-up for the Nasdaq Composite (COMP - 4,355.05), which managed to notch a 2.2 point, or 0.05%, gain by the close.

The CBOE Volatility Index (VIX - 16.37) tapped the brakes in today's session. At the close, the market's "fear gauge" had given back 0.5 point, or 3% -- but managed to close a second consecutive session north of 16.



5 Items on Our Radar Today:

  1. NATO warned that Russia's mobilization of 20,000 troops along Ukraine's eastern border could be a sign the country is preparing to invade. In a statement released Wednesday, NATO called the situation a "dangerous" one, saying, "We're not going to guess what's on Russia's mind, but we can see what Russia is doing on the ground -- and that is of great concern." Separately, Russian President Vladimir Putin signed an executive order today banning or limiting agricultural imports from countries that have imposed sanctions on Russia.(Reuters, CNBC)
  2. The U.S trade deficit fell 7% in June to $41.5 billion, largely due to a three-year low for petroleum imports. The trade deficit was little changed over the course of the second quarter, with the average three-month gap arriving at $44.4 billion in June, compared to $44.6 billion as of April. (MarketWatch)
  3. M&A news hit the wires in a flurry, with Twenty-First Century Fox Inc (NASDAQ:FOXA) withdrawing its bid for Time Warner Inc (NYSE:TWX), and Sprint Corporation (NYSE:S) pulling its offer for T-Mobile US Inc (NYSE:TMUS) off the table.
  4. Globus Medical Inc (NYSE:GMED) plunged 18% today, and more downside could be on the horizon for the medical device manufacturer.
  5. United States Steel Corporation (NYSE:X) retreated from multi-year highs, prompting an uptick in put activity on the stock.

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

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