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Markets Little Changed at End of Choppy Trading Day

ADP employment report discourages labor-market watchers

by 2/5/2014 4:19:12 PM
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"The Institute for Supply Management's (ISM) services data came out, and it was stronger than expected," summarized Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "This, of course, comes on the heels of Monday's ISM manufacturing data, which showed a huge slowdown last month. All of this only adds to the mystery over recent economic data. Is the weather really to blame for the sudden drop in most economic data? Well, Friday is the always-important jobs number from January, and maybe we'll get more of a clue then. But the reality is the weather probably has slowed things down ... we just don't know how much yet." Today's data sparked choppy trading in the major market indexes. The Dow Jones Industrial Average (DJI) traded in a nearly 140-point range before settling close to the breakeven mark.

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

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Before closing with a decline of 5 points, or 0.03%, the Dow Jones Industrial Average (DJI - 15,440.23) swung in a range between 15,478.21 and 15,340.69 on the day. Seventeen of the Dow's 30 components closed higher, led by The Walt Disney Company (NYSE:DIS), which rose by 1%. Pfizer Inc. (NYSE:PFE) tumbled from first to worst, bringing up the rear with a 1.7% decline.

The S&P 500 Index (SPX - 1,751.64) spent nearly all of today's session south of breakeven. By the close, the index had shed 3.6 points, or 0.2%. The Nasdaq Composite (COMP - 4,011.55) was the day's underperformer, losing 20 points, or 0.5%.

See-saw price action continued for the CBOE Volatility Index (VIX - 19.95), which gained 0.8 point, or 4.4%, to move back toward the 20 area.



A Trader's Take:

"The November lows near 1,740 held on the S&P 500 today, so this was one step in the right direction. Also, the ISM services data showed surprising strength when most of the other recent economic data has been weak," Detrick continued. "Still, bigger picture, you have to be encouraged by earnings season. It is quickly winding down and the estimates at the start were for about 6% growth year-over-year. Well, we are close to 8% currently, with a real shot at 9% growth. Sure, currently the emerging market drama has sidetracked everyone to a degree, but in the end, earnings drive the economy, and this is a bigger-picture positive."

5 Items on Our Radar Today:

  1. Automatic Data Processing (ADP) data revealed that 175,000 private-sector jobs were created in January, narrowly missing economists' estimates. The December figure was revised slightly lower to reflect the creation of 217,000 jobs. Elsewhere, the Institute for Supply Management's (ISM) services index edged higher to 54 in January from 53 the previous month. Readings north of 50 indicate expansion versus contraction. (CNBC, MarketWatch)
  2. Charles Plosser, head of Philadelphia's Federal Reserve Bank, took a hawkish tone today, recommending a more aggressive tapering plan moving forward. "The longer we continue [asset] purchases in such an environment [of improving labor-market conditions and stabilizing inflation], the more likely we will fall behind the curve in reducing the extraordinary degree of monetary policy accommodation," he noted. (Reuters)
  3. Is outperforming Micron Technology, Inc. (NASDAQ:MU) headed for a trading range? One large-scale speculator seems to think so.
  4. Front-month call sellers set their sights on a short-term top for Netflix, Inc. (NASDAQ:NFLX).
  5. Groupon Inc (NASDAQ:GRPN) enjoyed a price-target hike ahead of today's open.

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

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