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Nasdaq Keeps Climbing; Home Depot Bolsters Dow Jones Industrial Average

The DJI continued to climb, with help from The Home Depot, Inc.

by 8/19/2014 4:17:49 PM
Stocks quoted in this article:

The Dow Jones Industrial Average (DJI) extended Monday's advance, with solid earnings from The Home Depot, Inc. (NYSE:HD) fueling the blue chips' fire. In addition, encouraging housing data bolstered sentiment, and the latest inflation figures stoked hopes for a lengthier-than-expected period of record-low interest rates from the Fed. Against this backdrop -- and ahead of tomorrow's Federal Open Market Committee (FOMC) meeting minutes -- the Dow added another 81 points, while the Nasdaq Composite (COMP) extended its quest for new highs.

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

  • Will Lowe's Companies, Inc. (NYSE:LOW) fare as well as Home Depot in the earnings confessional? Option players hope so.
  • Facebook Inc (NASDAQ:FB) option buyers are anticipating record highs.
  • Was Justin Bieber responsible for Elizabeth Arden, Inc.'s (NASDAQ:RDEN) steepest quarterly loss on record?
  • Plus ... Fed watchers dissect inflation data, Steve Ballmer trades a board seat for a floor seat, and Carl Icahn offers his two cents on the Family Dollar Stores bidding war.
Trading Topic of the Week -- Reasons to Dodge Directional Risk: Lower the risk of a 100% loss. When you're playing straddles, at least one of your options will typically expire with some intrinsic value remaining.

The Dow Jones Industrial Average (DJI - 16,919.59) tacked on nearly 81 points, or 0.5%, as 21 of its 30 components settled higher. Home Depot led the advancing majority with a post-earnings jump of 5.6%, while AT&T Inc. (NYSE:T) paced the nine decliners with a 0.5% drop.

The S&P 500 Index (SPX - 1,981.60) gained 9.9 points, or 0.5%, to end north of 1,980 for the first time since July 24. The Nasdaq Composite (COMP - 4,527.51) notched a 14-year peak for the second straight session, topping out at 4,528.91 before trimming its lead to 19.2 points, or 0.4%.

The CBOE Volatility Index (VIX - 12.21) retreated 0.1 point, or 0.9%, but found an intraday foothold in the 12 area.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

5 Items on Our Radar Today:

  1. Both the consumer price index (CPI) and the core CPI -- which excludes food and energy costs -- rose a seasonally adjusted 0.1% in July, the Labor Department reported. The relatively tame data bolstered hopes that the Fed will hold off on raising interest rates until the latter half of next year. Meanwhile, U.S. housing starts skyrocketed 15.7% to a seasonally adjusted annual rate of 1.09 million units in July, topping expectations. In addition, June's housing starts were upwardly revised, while July's building permits rose a bigger-than-anticipated 8.1%, according to the Commerce Department. (MarketWatch; Reuters, via CNBC)
  2. Former Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer announced his departure from the company's board to focus on the L.A. Clippers. Elsewhere, Apple Inc. (NASDAQ:AAPL) topped the century mark for the first time since its split, much to the delight of recent option bulls. (Reuters; CNBC)
  3. Activist investor Carl Icahn weighed in on the bidding war for Family Dollar Stores, Inc. (NYSE:FDO).
  4. Alcoa Inc (NYSE:AA) traders exploited the fire sale in the options pits.
  5. Nokia Corporation (ADR) (NYSE:NOK) speculators bought to open weekly calls.
EARNINGS

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

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