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Markets Start Week Strong; S&P 500 Tags Record Intraday High

Oil rallies on Middle East concerns; gold nears four-month high

by 2/24/2014 4:18:34 PM
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"The S&P 500 Index (SPX) broke out to a new all-time intraday high today, while the Nasdaq Composite (COMP) hit its highest point in nearly 14 years," reported Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Funny how just three weeks ago, the world was ending and emerging markets were going to lead a sell-off. Well, now we are making new highs, so it looks like that was yet another freak-out by investors following January's 6% dip." While the Dow Jones Industrial Average (DJI) failed to follow its index peers into new-high territory, it did enjoy another triple-digit gain.

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

Plus ... Consolidation in the semiconductor sector, another new high for Netflix, Inc. (NASDAQ:NFLX), and pre-event speculation on Tesla Motors Inc (NASDAQ:TSLA).

The Dow Jones Industrial Average (DJI - 16,207.14) bolted higher out of the gate and closed with a gain of 103.8 points, or 0.6%, to end the session back above its 40-day moving average. Of the 21 Dow advancers, UnitedHealth Group Inc (NYSE:UNH) was the top performer, rising nearly 3%. Verizon Communications Inc. (NYSE:VZ) paced the nine decliners with its 2.2% loss.

The S&P 500 Index (SPX - 1,847.61) tagged a new all-time intraday high of 1,858.71 before closing up 11.4 points, or 0.6%, just shy of a new closing peak. The index is now less than a point away from entering positive territory for 2014. Elsewhere, the Nasdaq Composite (COMP - 4,292.97) reached its highest level since April 2000, and ended 29.6 points, or 0.7%, higher.

The CBOE Volatility Index (VIX - 14.23) lost more ground, shedding 0.5 point, or 3.1%.



A Trader's Take:

"Similar to what we saw throughout 2013, we all know we are up a lot, and we know it won't last forever," added Detrick. "But on very mild pullbacks, the amount of fear that shows up is simply off the charts. This produces violent bottoms and subsequent bounces to new highs. What would scare me is a 4% dip followed by everyone saying, 'don't worry, the market will bounce like it always does...' Well, we haven't seen anything like that on pullbacks. Furthermore, we started noting over a week ago," Detrick continued, "that small-caps are starting to once again show some strength. That was a clue that stocks were ready to break out, and sure enough, it has happened. While the Russell 2000 Index (RUT) isn't at new all-time highs yet, it is very close. And bullish traders have to like seeing tech and small-caps taking charge here."

5 Items on Our Radar Today:

  1. Markit's preliminary services sector purchasing managers index dipped to 52.7 this month from January's 56.7 reading. Still, readings north of 50 are indicative of economic expansion. (Reuters)
  2. Chip concerns TriQuint Semiconductor (NASDAQ:TQNT) and RF Micro Devices, Inc. (NASDAQ:RFMD) announced a merger of equals. The deal's terms place RFMD CEO as the helm of the combined company, while TQNT's CEO will act as the nonexecutive chairman. TQNT shareholders will collect 1.675 shares in the new company; RFMD shareholders will hold one share of the new firm for every RFMD share held. (MarketWatch)
  3. Another new record high for Netflix, Inc. (NASDAQ:NFLX) inspired both bullish and bearish short-term betting via weekly options.
  4. Put sellers descended upon Tesla Motors Inc's (NASDAQ:TSLA) options pits ahead of remarks from CEO Elon Musk.
  5. This week's Brand Face-Off pits American Eagle Outfitters (NYSE:AEO) against The Gap Inc. (NYSE:GPS). Which popular apparel retailer has the edge in the market?

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

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