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Stocks Take a Breather Ahead of ECB, Payrolls

Gold breaks its six-session losing streak, closes fractionally higher on the day

by 6/3/2014 4:18:49 PM
Stocks quoted in this article:

"It was a very slow day," noted Schaeffer's Trading Analyst Peter Bryans. "There weren't any 'A-list' items on the economic calendar, and the market barely budged. However, the data picks up a bit tomorrow, and Wall Street will be watching the European Central Bank (ECB) meeting and Friday's nonfarm payrolls report." Against this ho-hum backdrop, the Dow Jones Industrial Average (DJI) and the S&P 500 Index (SPX) took a break from their record-setting ascents, closing modestly lower on the day.

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

Trading Topic of the Week -- Trading Low-Priced Options: DON'T be tempted by the cheapest option available. It may seem like a good idea to keep your entry costs low by purchasing the lowest-priced option available. However, bear in mind that the cheapest contracts are most likely to expire worthless.

The Dow Jones Industrial Average (DJI - 16,722.34) spent the day in the red, swallowing a loss of 21.3 points, or 0.1%, by the time the dust settled. Eighteen of the Dow's 30 blue chips finished lower, with Nike Inc (NYSE:NKE) and Verizon Communications Inc. (NYSE:VZ) each shedding 1.5%. Intel Corporation (NASDAQ:INTC) paced the advancing minority, tacking on 1.5%.

The S&P 500 Index (SPX - 1,924.24) failed to hit an intraday record for the first session in six, ending with a loss of 0.7 point, or less than 0.1%. The Nasdaq Composite (COMP - 4,234.08) spent most of the session south of breakeven, giving up 3.1 points, or 0.1%, to bring its losing streak to three days.

The CBOE Volatility Index (VIX - 11.87) muscled higher for a second straight day, ending north of its 10-day moving average for the first time since May 20. However, the "fear gauge" -- which added 0.3 point, or 2.5%, on the day -- remains south of the closely watched 12 level.

CLOSING SUMMARY  INDICES

CLOSING SUMMARY  NYSE AND NASDAQ

A Trader's Take:

"If there was one positive for the bulls, it was that small-caps -- measured by the iShares Russell 2000 ETF (IWM) -- came off their lows," added Bryans. "Technically speaking, the IWM was trading right around the 'gap area' that was filled in yesterday's session. It will be interesting to see which way small-caps break in the next few days, or if it's just more of the same slow, sideways action."

5 Items on Our Radar Today:

  1. Vehicle sales jumped in May, as shoppers returned to the lots after a cold winter. General Motors Company (NYSE:GM) announced a 13% increase in sales, topping analysts' expectations for its best May since 2007. Ford Motor Company (NYSE:F) reported year-over-year sales growth of 3%, and sales were also on the upswing at Chrysler, Toyota Motor Corp (ADR) (NYSE:TM), and Nissan. (Los Angeles Times )
  2. Esther George, president of Kansas City's Federal Reserve Bank, suggested that interest-rate hikes could be coming both "sooner" and "faster" than earlier projections might have indicated. Earlier this year, the median outlook among central bank leaders was for an initial hike in the summer of 2015, before a measured progression to 2.25% by the end of 2016. Keeping rates this low for this long could, in George's opinion, pose "risks to achieving sustainable [economic] growth over the longer run." (MarketWatch)
  3. The battle for control of Hillshire Brands Co (NYSE:HSH) heated up, as Pilgrim's Pride Corporation (NASDAQ:PPC) upped its buyout bid to $55 per share. This exceeds its original bid by $10 and tops the $50-per-share bid on the table from Tyson Foods, Inc. (NYSE:TSN). All three companies are staying quiet on the subject, but sources say Hillshire is preparing to hold talks with both interested parties. (The New York Times)
  4. Taking advantage of historically low option premiums, AT&T Inc. (NYSE:T) traders chose sides on Ma Bell's short-term outlook.
  5. Is Delta Air Lines, Inc. (NYSE:DAL) poised for additional gains?
EARNINGS

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

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