"Stocks got a bit of a boost as news from Washington indicated a three-month extension of the debt ceiling would be welcomed by the White House," noted Schaeffer's Senior Equity Analyst Joe Bell. "Existing home sales were below expectations, but most of this morning's earnings reports met expectations," Bell continued. The Dow Jones Industrial Average (DJI) managed to top the 13,700 level on its way to a new annual zenith, while other notable indexes reached their own multi-year peaks. By the close, the major indexes were all modestly higher as investors looked ahead to some major earnings reports.
Continue reading for more on today's market, including:
The Dow Jones Industrial Average (DJI) notched a new annual peak of 13,712.13, which also marked the index's closing value. The Dow settled up 62 points, or 0.5%, higher, for its first close north of 13,700 since October 2007. Of the Dow's 30 components, 22 finished in the black, led by UnitedHealth Group (NYSE:UNH), which gained 2.7% today. Pacing the underperforming minority was Coca-Cola (NYSE:KO), off 1.5%.
The S&P 500 Index (SPX) advanced right into the close, notching another new multi-year milestone before settling up 6.5 points, or 0.4%, closing at its intraday peak. The Nasdaq Composite (COMP) rose 8.5 points on the day, gaining 0.3%. The tech-rich index remains more than 50 points south of its own annual high.
The CBOE Market Volatility Index (VIX) closed off a fraction despite spending most of the day in positive territory. By the close, it had settled down 0.2%, or less than 0.1 point.
A Trader's Take:
"This morning got off to a bit of a lackluster start, but buying pressure picked up throughout the day, and we actually had a pretty nice session with low volatility," observed Bell. "Many market participants will be looking forward to the slew of earnings reports after the close, most notably Google (NASDAQ:GOOG) and IBM (NYSE:IBM)," he said.
3 Things to Know About Today's Market:
Plus ... There may be another player in the mix when it comes to a potential leveraged buyout of Dell (NASDAQ:DELL) -- Microsoft (NASDAQ:MSFT). The software giant reportedly has plans to invest up to $3 billion in the PC maker, which remains one of the largest companies to include MSFT software on its machines. The precedent for this move is a good one – in 1997, MSFT invested $150 million in a struggling tech company called Apple (NASDAQ:AAPL). DELL responded favorably to these reports today, adding 2.2% to end the session at $13.12.
Today's Top Tweet:
"'Never talk about a profit until you have two sides to a transaction,' my Dad, late 1970s."
@matterhornbob, (BCarter), 9:17 a.m.
5 Stocks We Were Watching Today:
Question of the Day:
Q: What does "buy to open" mean? What about "sell to open"?
A: Every new option position must be opened. If a trader is opening a new long position (e.g., buying a call because of a bullish outlook), he will be buying to open. A trader taking the short side of a trade (e.g., selling a call because downside is expected), is selling that option to open. At the other end of the trade -- when positions are being exited -- the terminology is easy. Traders who bought to open will sell to close and those who sold to open will buy to close. In other words, the two transactions will offset one another at the end of the trade.
For a look at today's options movers and commodities activity, head to page 2.
The Case for Big Moves in IWM and QQQ
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