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Technology Lags, Blue-Chips Lead, as S&P 500 Nabs New High

Oil and gold both edged higher as investors weigh Ukraine developments against domestic data

by 3/6/2014 4:19:04 PM
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"News was fairly light, but that didn't stop the S&P 500 Index (SPX) from making a new all-time high -- can't complain there," quipped Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Although volume was still light, with traders getting ready for the monthly jobs data tomorrow, you have to be impressed with the resiliency of the bulls here. It seems like ages ago when Russia and Ukraine were hitting futures on Sunday night -- now it is almost like that didn't even happen." Against this backdrop, the Dow Jones Industrial Average (DJI) moved modestly higher on the day, and is within 1 percentage point of entering positive territory for 2014.

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

  • It's not even available to the public yet, but Google Glass is creating quite a stir, while Google Inc (NASDAQ:GOOG) edges toward another record high.
  • How options traders are speculating on the recent rebound in Twitter Inc (NYSE:TWTR) shares.
  • The Time Warner Cable Inc (NYSE:TWC) options pits have seen a rush of activity as shareholders await a ruling on the potential merger with Comcast Corporation (NASDAQ:CMCSA).
  • Plus ... An update on eurozone economics, a surprising drop in initial jobless claims, and a shift in investing strategy for RadioShack Corporation (NYSE:RSH) bears.
Trading Topic of the Week -- Ways to Win with Aggressive Trades: Keep holding periods brief. This is one scenario where patience isn't a virtue -- to preserve capital, act quickly to shut down underperforming trades.

The Dow Jones Industrial Average (DJI - 16,421.89) was in positive territory for the entirety of the session, and closed with a gain of 61.7 points, or 0.4%. American Express Company (NYSE:AXP) led the 25 Dow advancers, rising 1.5% on the day. Pfizer Inc. (NYSE:PFE) paced the five decliners with its 0.9% loss.

The S&P 500 Index (SPX - 1,877.03) rallied to an all-time intraday high of 1,881.94 before closing with a 3.2 point, or 0.2%, gain, putting another record close in the books. In a reversal of Wednesday's outperformance, the Nasdaq Composite (COMP - 4,352.13) lagged its index brethren, ending the session with a loss of 5.8 points, or 0.1%.

The CBOE Volatility Index (VIX - 14.21) popped above the 14 level today, closing with a modest gain of 0.3 point, or 2.3%.



A Trader's Take:

"Financials had another solid day, and the Financial Select Sector SPDR Fund (XLF) made a new multi-year high in the process," Detrick continued. "Remember, financials had lagged most of this year, and it was probably holding the overall market back somewhat. Now this influential group is starting to show strength, and that bodes well for the current bull run."

5 Items on Our Radar Today:

  1. The Bank of England and European Central Bank (ECB) both opted to leave their key interest rates unchanged, and ECB President Mario Draghi downplayed deflationary risks. The central bank also lifted its economic outlook for the eurozone to 1.2%, up 0.1 percentage point from the most recent forecast. (Bloomberg)
  2. The number of initial jobless claims dropped by a wider-than-expected 26,000 last week to a seasonally adjusted reading of 323,000, a new three-month low. The four-week moving average of claims declined by 2,000 to 336,500. (Reuters)
  3. The Labor Department reported that productivity expanded at a 1.8% rate in the fourth quarter of 2013, a notable drop from the 3.5% productivity growth seen in the third quarter. Elsewhere, factory orders slipped by 0.7% in January, the second consecutive monthly drop. Orders for core capital goods, however, rose 1.5% during the month, suggesting that businesses are willing to spend more. (USA Today; AP, via ABC News)
  4. Home-improvement retailers The Home Depot, Inc. (NYSE:HD) and Lowe's Companies, Inc. (NYSE:LOW) both suffered blows at the hands of Wedbush this morning.
  5. With RadioShack Corporation (NYSE:RSH) on the hard-to-borrow list, bearishly minded investors are turning to put options .

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

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