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Dow, S&P 500 Continue Their (Slow) Trek Into New-High Territory

Apple Inc. (AAPL) began its weeklong Worldwide Developers Conference

by 6/2/2014 4:27:02 PM
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"The big data point on today's calendar was the Institute for Supply Management (ISM) number that -- when corrected from an earlier reading -- came in just slightly above forecasted numbers," noted Schaeffer's Trading Analyst Peter Bryans. "This wasn't really enough to move the market, and all of the major indexes were mostly flat for the duration of the trading day." Although the day's gains were modest, both the Dow Jones Industrial Average (DJI) and the S&P 500 Index (SPX) rose to new intraday highs and closed in unprecedented territory.

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

  • Speculation over the next big thing from Apple Inc. (NASDAQ:AAPL) dominated today's headlines.
  • Our CEO and founder Bernie Schaeffer warned of an impending "knockout punch" facing a particular breed of speculators.
  • Optimism swells in the Zynga Inc (NASDAQ:ZNGA) options pits, even while the stock continues to flail on the charts.
  • Plus ... The ISM struggles with math, Apple kicks off its Worldwide Developers Conference, and one Sprint Corporation (NYSE:S) trader sees a slowdown in the shares.
Trading Topic of the Week -- Trading Low-Priced Options: DO target smaller stocks with the potential for big gains. It's easy to get caught up in the excitement surrounding big-name, high-dollar stocks like Apple Inc. (NASDAQ:AAPL). Remember, though -- a small-cap stock trading at $10 per share needs to rise only 10 points to double in value.

The Dow Jones Industrial Average (DJI - 16,743.63) traded north and south of the flat line today, but tagged a new all-time intraday high of 16,756.64 and settled at record peak as well, up 26.5 points, or 0.2%. The Dow's 16 advancers were paced by Caterpillar Inc. (NYSE:CAT), which added 1.5%, while Visa Inc (NYSE:V) and Exxon Mobil Corporation (NYSE:XOM) each slipped 0.6% to bring up the rear.

The S&P 500 Index (SPX - 1,924.97) hit a fresh intraday peak of 1,925.88 and eased to a new all-time closing high by the narrowest of margins, closing up 1.4 points, or 0.1%, on the day. The Nasdaq Composite (COMP - 4,237.20), however, underperformed its counterparts and lost 5.4 points, or 0.1%.

The CBOE Volatility Index (VIX - 11.58) closed marginally higher, up 0.2 point, or 1.6%, after hitting a new annual low of 11.29 during the session. The market's "fear gauge" also peeked above the 12 level, above which it hasn't closed since May 22.



A Trader's Take:

"Technically speaking, the iShares Russell 2000 Index (ETF) (IWM) did fill its gap to the downside," added Bryans. "This was the gap that resulted from the initial pop higher that we witnessed at the start of last week's trading. Meanwhile, today's price action was really just more of the same, as the market doesn't make much progress on a day-by-day basis, and large-caps continue to lead. Friday's jobs report will likely prove to be the biggest data point this week."

5 Items on Our Radar Today:

  1. In a rather odd development, the ISM reported an erroneous number for the May manufacturing index, noting it was 53.2. Hours later, the ISM said the correct figure was 56, which was just north of economists' estimates. Meanwhile, Markit said its final May manufacturing index rose to a three-month high of 56.4, reflecting continued expansion in the sector. (CNBC; Bloomberg )
  2. Construction spending edged up 0.2% in April, per the Commerce Department, falling short of economists' expectations. It was, however, the third straight increase in the figure, and the March reading was revised higher to reflect a 0.6% gain. (The Associated Press, via Dallas News)
  3. Apple kicked off its week-long Worldwide Developers Conference today, and one of the most chatted-about unveilings was iOS 8, a new operating system that will soon be available for iPhones and iPads. The tech giant also announced Mac OS X 10.10, also known as Yosemite. (Mashable)
  4. Short-term calls were popular in Facebook Inc (NASDAQ:FB) options pits today.
  5. One trader sold a short straddle on Sprint Corporation (NYSE:S) to wager on limited volatility in the next few weeks.

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

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