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Dow Jones Industrial Average Mounts a Comeback as Earnings Trump All

The DJI closed the week firmly atop the 17,000 level

by 7/18/2014 4:20:16 PM
Stocks quoted in this article:

The Dow Jones Industrial Average (DJI) recovered from Thursday's sell-off to end the week respectably higher, despite growing geopolitical tensions. As negative headlines continued to pour out of Ukraine and Gaza, traders focused instead on stronger-than-forecast second-quarter revenue from Google Inc. (NASDAQ:GOOGL). Today's advance was broad-based, with big-caps and small-caps alike marching higher -- though crude and gold futures couldn't manage to maintain Thursday's positive momentum.

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

  • This under-the-radar stock rallied from a new record low to a 15% gain -- and options players jumped on the whipsaw price action.
  • Tech stock Advanced Micro Devices, Inc. (NYSE:AMD) got hammered by analysts after confessing to a second-quarter loss.
  • Should you stop watching the VIX? Schaeffer's contributor Adam Warner offers a rational take on the market's "fear index."
  • Plus ... international pressure mounts on Putin, a surprise decline in consumer sentiment, and major weekly moves for oil and gold.
Trading Topic of the Week -- How to Get Started with Options: Take advantage of affordable hedging opportunities. Weekly options offer an economical way to guard your stock positions against event-related risk.

The Dow Jones Industrial Average (DJI - 17,100.18) rallied 123.4 points, or 0.7%, to bring its weekly gain to 0.9%. Johnson & Johnson (NYSE:JNJ) and The Boeing Company (NYSE:BA) paced the 28 advancing blue chips with gains of 1.4% each. General Electric Company (NYSE:GE) ended down 0.6% after earnings, while Intel Corporation (NASDAQ:INTC) finished flat. The Dow has now finished two of the past three weeks atop the 17,000 level.

The S&P 500 Index (SPX - 1,978.22) jumped 20.1 points, or 1%, to notch an advance of 0.5% for the week. The Nasdaq Composite (COMP - 4,432.15) rose 68.7 points, or 1.6% -- but collected the smallest weekly gain, up just 0.4% from last Friday's close.

The CBOE Volatility Index (VIX - 12.06) took a tumble, giving up 2.5 points, or 17.1%. As a result, the VIX gave up all of its ground for the week, ending down 0.2%.



5 Items on Our Radar Today:

  1. Intelligence now indicates that Malaysia Airlines Flight 17 was shot down by a surface-to-air missile launched by Russian-backed separatists in eastern Ukraine. U.S. Ambassador to the United Nations Samantha Power called on Russian President Vladimir Putin to take steps toward resolving the ongoing conflict in Ukraine, saying, "Russia can end this war. Russia must end this war." Separately, Israeli Prime Minister Benjamin Netanyahu cautioned his military to prepare for a "significant" expansion of the ground offensive in Gaza. (TIME; ABC News)
  2. Consumers turned gloomier in early July, with the Thomson Reuters/University of Michigan sentiment index pulling back to 81.3 -- down from 82.5 at the end of June. By contrast, economists were looking for a modest uptick. Meanwhile, the Conference Board's index of leading economic indicators climbed 0.3% in June, notching its fifth consecutive month on the upswing. (Reuters; Bloomberg)
  3. Netflix, Inc. (NASDAQ:NFLX) tends to rally after earnings, but put players aren't betting on history to repeat itself.
  4. Short-term call buyers bet on a comeback for embattled retailer JC Penney Company Inc (NYSE:JCP).
  5. Last-minute bears placed their bets on Zynga Inc. (NASDAQ:ZNGA) ahead of expiration.

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

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