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Slow Day Ends With Stocks at New Highs

Gold drops nearly 4% in May, while oil gains 3%

by 5/30/2014 4:23:25 PM
Stocks quoted in this article:

"It has been the same story all week," quipped Schaeffer's Senior Equity Analyst Joe Bell, CMT. "There was little in the way of economic data, and the market continued to grind sideways. Other than the initial post-holiday bounce Tuesday morning, most major indexes have struggled to get anything done all week long." Both the Dow Jones Industrial Average (DJI) and the S&P 500 Index (SPX) ended the week and the month in positive territory, tagging new all-time closing highs.

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

Trading Topic of the Week -- Tips for Buying Weekly Options: Focus on liquid names with narrow bid/ask spreads. There are two major benefits here -- ease of entry and exit, and lower risk of slippage.

The Dow Jones Industrial Average (DJI - 16,717.17) visited both sides of the flat line today, but closed in the green, up 18.4 points, or 0.1%, to secure a new all-time closing peak. The blue-chip index rose 0.7% this week and added 0.8% in May. Twenty-two of the Dow's components rose today, with Microsoft Corporation (NASDAQ:MSFT) leading the charge, up 1.5%. Caterpillar Inc. (NYSE:CAT) paced the decliners with a 1.3% drop.

The S&P 500 Index (SPX - 1,923.57) continued its own march into uncharted territory, ending at a new high with a 3.5-point, or 0.2%, gain. The SPX rose 1.2% for the week and 2.1% for the month. Elsewhere, the Nasdaq Composite (COMP - 4,242.62) underperformed its peers, losing 5.3 points, or 0.1%. The index ended the week up 1.4%, however, and closed May with a 3.1% gain.

The CBOE Volatility Index (VIX - 11.40), on the other hand, hit a new annual intraday low of 11.32 before closing with a loss of 0.2 point, or 1.5%. This week, the VIX edged up 0.4%, bringing its monthly loss to nearly 15%.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

A Trader's Take:

"We received a pretty good Chicago purchasing managers index (PMI) report this morning, and consumer sentiment was a little worse than expected, but neither affected the market in a very big way," continued Bell. "With many major indexes near all-time highs, we continue to see realized volatility at multi-year lows."

5 Items on Our Radar Today:

  1. The Thomson Reuters/University of Michigan final sentiment index for May dropped to 81.9 from 84.1 in April, coming in shy of Street estimates. A slow pace in wage increases and heightened gasoline prices may be having an impact on this figure. The current conditions index dropped to 94.5 from 98.7 the month prior, while the expectations index (measuring sentiment for six months from now) slipped to 73.7 from 74.7 in April. (Bloomberg)
  2. The Chicago business barometer (aka the Chicago PMI) rose to 65.5 in May, topping economists' expectations and hitting the highest level since October. Readings above 50 point to expansion in the manufacturing sector. (MarketWatch)
  3. Pre-earnings Lions Gate Entertainment Corp. (USA) (NYSE:LGF) traders could be heading for a losing trade.
  4. Option bears continue to bet against Intel Corporation (NASDAQ:INTC), despite the stock's recent outperformance.
  5. Currently the target of a bidding war for its hand, Hillshire Brands Co (NYSE:HSH) was nonetheless downgraded this morning.
EARNINGS

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

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