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Hot Stock News for Options Traders

Tech Stocks Lead Market Higher; Dow Notches New All-Time Peak

The VIX dips below 12 for the first time since January, closes solidly lower

by 5/12/2014 4:19:37 PM
Stocks quoted in this article:

"There weren't a lot of major events to start the week, but that doesn't mean the week will be dull," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "We are set to hear retail sales, inflation numbers, jobless claims, and housing starts. And after a strong start to the week, many participants will look toward this data to see how much the economy has improved after the rough winter." Shortly after the open today, the Dow Jones Industrial Average (DJI) notched a new all-time high, and continued higher into the close, coming to rest on a triple-digit gain at a fresh closing peak.

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

  • With Tesla Motors Inc (NASDAQ:TSLA) in rebound mode, speculators can't seem to keep their hands off its soon-to-expire front-month options.
  • Upbeat fundamental news had these three stocks making significant headway on the charts.
  • Intel Corporation (NASDAQ:INTC) may have spent the day in the green, but option bears refuse to let up.
  • Plus ... Consolidation in the food industry, Charles Plosser's thoughts on the education system, and skeptical bets on Bank of America Corp (NYSE:BAC).
Trading Topic of the Week -- Ways to Interpret Short Interest: Consider the short-to-float ratio. By checking out a stock's short-to-float ratio, you can quickly gauge how many traders are betting on the shares to drop.

The Dow Jones Industrial Average (DJI - 16,695.47) hit new-high territory out of the gate this morning, but secured its latest all-time peak of 16,704.84 shortly before the close. By the time the bell sounded, the blue-chip index had added 112.1 points, or 0.7%. Two dozen of the Dow's components rose on the day, led by General Electric Company (NYSE:GE) and Nike Inc (NYSE:NKE), which each gained 1.6%. Pacing the six underperformers was The Procter & Gamble Company (NYSE:PG), which slipped 0.8%.

The S&P 500 Index (SPX - 1,896.65) got within a fraction of a point from its own all-time intraday high, and settled on a gain of 18.2 points, or 1%, a new closing peak. The Nasdaq Composite (COMP - 4,143.86) outperformed its index peers, as technology stocks bounced following last week's slump. At the close, the COMP was up 72 points, or 1.8%.

The CBOE Volatility Index (VIX - 12.23) hit an intraday low of 11.88 -- its first trip south of 12 since mid-January -- and closed down 0.7 point, or 5.3%. Since last Wednesday's intraday high of 14.49, the market's "fear gauge" has slipped 15.6%.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

A Trader's Take:

"The big laggards of 2014 finally displayed some strength today, and small-caps performed very well," added Bell. "The consumer discretionary space took a leadership role ahead of the retail sales report that is set to be released this week."

5 Items on Our Radar Today:

  1. The latest bit of merger-and-acquisition news saw Hillshire Brands Co (NYSE:HSH) bidding $4.3 billion (or $6.6 billion including debt) for Pinnacle Foods Inc (NYSE:PF). The deal -- Hillshire's third in a year -- will bring the Birds Eye, Wish-Bone, and Vlasic brands under the Hillshire umbrella. (Reuters)
  2. Philadelphia Fed President Charles Plosser spoke at the bank's Reinventing Older Communities conference. While he didn't speak to tapering activity or monetary policy, he did express concerns that the U.S. educational system is not properly equipped to prepare today's youth for "STEM" jobs, or those in the fields of science, technology, engineering, and math. (Bloomberg Businessweek)
  3. Bank of America Corp (NYSE:BAC) call sellers placed bets on short-term technical resistance.
  4. Another brokerage firm offered a vote of confidence for struggling Twitter Inc (NYSE:TWTR) shares.
  5. Bearish speculators scooped up Canadian Solar Inc. (NASDAQ:CSIQ) puts ahead of the company's trip to the earnings confessional on Friday.
EARNINGS

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

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