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Hot Stock News for Options Traders

Fed Decision Fails to Prop Up Dow Jones Industrial Average

Where Wall Street stands on Himax Technologies, Inc. (ADR) (NASDAQ:HIMX)

by 7/30/2014 4:25:21 PM
Stocks quoted in this article:

Stocks got off to a rough start today, due to a weaker-than-expected jobs report from Automatic Data Processing (ADP), and a gross domestic product (GDP) report that sparked fears of a quicker-than-anticipated rate hike. In the immediate aftermath of the Federal Open Market Committee's (FOMC) dovish policy decision, though, the Dow Jones Industrial Average (DJI) made its way higher, briefly peeking above breakeven. Nevertheless, the blue-chip index ended the day with a modest loss. The S&P 500 Index (SPX) also spent time on both sides of breakeven, but settled fractionally higher.

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

  • A look at 3 historical outperformers in the earnings confessional.
  • This option bear wasn't buying Himax Technologies, Inc.'s (ADR) (NASDAQ:HIMX) big rally, placing a big downside bet instead.
  • Why Whole Foods Market, Inc. (NASDAQ:WFM) puts were popular ahead of tonight's earnings release.
  • Plus ... The Fed continues to taper, private-sector job growth slows, and Yahoo! Inc. (NASDAQ:YHOO) rallies on rumors.
Trading Topic of the Week -- Trading Low-Priced Options: DO buy higher-delta options. The closer an option's delta is to 1.00 (for a call, or negative 1.00 for a put), the likelier it is that the option will retain some intrinsic value at expiration. This offers you some "insurance" against the possibility of a total loss.

The Dow Jones Industrial Average (DJI - 16,880.36) gave back 31.8 points, or 0.2%, by day's end. Eleven Dow components finished north of breakeven, with Nike Inc (NYSE:NKE) leading the way, gaining 1.9%. Meanwhile, The Coca-Cola Company (NYSE:KO) paced the blue-chip index's 19 losers, shedding 1.8% by the close.

The S&P 500 Index (SPX - 1,970.07) added 0.12 point to eke out a slight win. Meanwhile, the Nasdaq Composite (COMP - 4,462.90) fared better than its peers, adding 20.2 points, or 0.5%.

The CBOE Volatility Index (VIX - 13.33) muscled 0.05 point, or 0.4%, higher, for a second consecutive daily close above 13.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

5 Items on Our Radar Today:

  1. The Federal Open Market Committee (FOMC) decided to slash its monthly bond-buying stimulus by an additional $10 billion to $25 billion. Nevertheless, the FOMC stayed the dovish course by keeping the short-term interest rate near zero, and suggesting it would be a "considerable time" before a rate hike occurs. (CNBC)
  2. The ADP employment report revealed private-sector employers added more than 200,000 jobs for the fourth month in a row. Specifically, July saw the addition of 218,000 positions -- though the growth was weaker than the consensus estimate for 235,000 jobs, and marked a decline from the 281,000 jobs added in June. (MarketWatch)
  3. Find out what likely caused the YHOO rally, and how options traders responded.
  4. This pair of steel stocks made moves higher in the wake of recent earnings results.
  5. On the other hand, Buffalo Wild Wings (NASDAQ:BWLD) took a tumble, coming off a poorly received quarterly report and a couple of bearish brokerage notes.
EARNINGS

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

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