Dow Jones Industrial Average Adds 174 On AXP Earnings, Obamacare Talk

25 Options Trading Ideas for Earnings Season

by Karee Venema |

Published on Apr 20, 2017 at 4:27 PM
Updated on Apr 20, 2017 at 4:30 PM

The Dow Jones Industrial Average (DJIA) was up more than 200 points at its session high, as a positive earnings reaction for American Express helped overshadow post-earnings losses for Dow components Verizon and Travelers. Stocks also reacted to rumors a new vote to repeal Obamacare could be on the horizon, comments from Treasury Secretary Steven Mnuchin that the Trump administration could unveil a "major tax reform" plan "very soon," and calls from Fed Governor Jerome Powell for a rollback in bank regulations. Against this risk-on backdrop, the Dow swung back into the black for the week, while the Nasdaq Composite (COMP) closed at a record high.

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

  • 25 options trading ideas for earnings season.
  • A retail rally failed to stop options traders from buying puts on XRT.
  • How we scored huge gains with Wal-Mart call options.
  • Plus, the Dow stock on the verge of a breakout; a new high for Facebook; and Ocwen stock slumps.

After two consecutive days of triple-digit losses, the Dow Jones Industrial Average (DJIA - 20,578.71) jumped 174.2 points, or 0.9%. American Express stock easily paced the 25 Dow advancers with its 5.9% gain. Travelers stock led the five decliners with its 1.3% drop.

The S&P 500 Index (SPX - 2,355.84) closed above 2,350 for the first time since April 11, adding 17.7 points, or 0.8%. The Nasdaq Composite (COMP - 5,916.78) tacked on 53.7 points, or 0.9%, to close at its highest perch to date.

The CBOE Volatility Index (VIX - 14.15) gave back 0.8 point, or 5.2%, to close south of its 10-day moving average for the first time since April 4.

closing indexes summary april 20

nyse and nasdaq stats april 20

5 Items on Our Radar Today:

  1. President Donald Trump signed an order today prompting the Commerce Department to investigate whether the use of foreign steel represents a threat to national security. "Steel is critical to both our economy and our military," said Trump. "This is not an area where we can afford to become dependent on foreign countries." (Reuters)
  2. Marcato Capital Management recommended Buffalo Wild Wings remove its CEO Sally Smith, saying, "In order to get the company back on the right path, we need a management team that's more well-suited to the challenges of the company." The activist investor said the board has "blindly stood by management" at the restaurant chain, of which it owns 6.1%. Nevertheless, BWLD stock rose 6%. (CNBC)
  3. Ahead of earnings, this Dow stock just crossed over its 50-day moving average -- a historically bullish signal.
  4. A fresh price-target hike for Facebook stock sent the shares to a new record high of $144.25.
  5. Ocwen stock plunged 50% today, on news the mortgage company is being sued by U.S. regulators.

corporate earnings april 20
unusual options activity april 20
Data courtesy of Trade-Alert

Commodities

Oil prices dropped for a fourth straight day, as concerns over a domestic supply glut continued to swirl. At the close, May-dated crude futures expired at $50.27 per barrel -- down 17 cents, or 0.3%, on the day. June-dated crude shed 14 cents, or 0.3%, to settle at $50.71 per barrel.

Helped by a weaker dollar, gold eked out a small gain ahead of this weekend's presidential vote in France. Gold for June delivery settled up 40 cents at $1,283.80 an ounce.
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