Draghi's Stimulus Reassurances Help Dow Jones Industrial Average Pare Losses

The Dow Jones Industrial Average (INDEXDJX:DJI) has moved off its session lows on central bank chatter

by Karee Venema

Published on Nov 17, 2014 at 11:47 AM
Updated on Apr 20, 2015 at 5:32 PM

U.S. stocks have pared a portion of their earlier losses -- but were still lingering south of breakeven -- after European Central Bank (ECB) President Mario Draghi weighed in on global stimulus following reports that Japan has officially entered a recession. In a speech to the European Union's Parliament earlier, Draghi said the ECB remains "unanimous in its commitment to using additional unconventional instruments if needed."

Elsewhere, traders are weighing a pair of uninspiring manufacturing reports against the latest round of M&A activity. Specifically, business activity in New York rose by a slimmer-than-expected margin in November, while U.S. industrial production in October fell just short of economists' consensus estimate, due to a sharp drop in motor vehicle output. Meanwhile, on the corporate front, Halliburton Company (NYSE:HAL) has agreed to buy rival Baker Hughes Incorporated (NYSE:BHI) for roughly $35 billion, while blue chip Pfizer Inc. (NYSE:PFE) unveiled a deal of its own. Against this backdrop, the Dow Jones Industrial Average (INDEXDJX:DJI) is 11.7, or 0.07% lower, the S&P 500 Index (SPX) is down 3.3 points, or 0.2%, while the Nasdaq Composite (COMP) has shed 25.4 points, or 0.5%.

Continue reading for more on today's market -- and don't miss:

  • The drugmaker soaring on acquisition-related news.
  • Option traders are rolling the dice on another technical milestone for this outperforming software issue by week's end.
  • Plus ... Checking in on the CBOE Volatility Index (VIX), the SPDR S&P 500 ETF Trust (SPY), and other noteworthy stats at midday.

Midday Market Stats

Among the stocks with notable call volume is biopharmaceutical firm Celldex Therapeutics, Inc. (NASDAQ:CLDX), which has surged more than 29% to $18.30 on upbeat drug trial data and a pair of bullish brokerage notes. CLDX calls are trading at 14 times the intraday average, and are outpacing puts by a roughly 5-to-1 margin. Option bulls appear to be cashing in their chips on the November 14 and 15 calls, which are both seeing sell-to-close activity, per the International Securities Exchange (ISE).

For more midday statistics and stocks on the move, head to page 2.

One of the major Nasdaq losers is Dreamworks Animation SKG, Inc. The equity was last seen 14.7% lower at $22.20, following reports that M&A talks with Hasbro, Inc. (NASDAQ:HAS) have come to a close. Due to today's bearish gap, the stock has been placed on the short-sale restricted list, and put volume has soared to 11 times what's typically seen at this point in the day, as traders look for alternate ways to bet bearishly on DWA.

Although CLDX is the leading the Big Board advancers, fellow biotech name NeoStem Inc (NASDAQ:NBS) is also trading solidly higher -- up 9% to $6.73. Today's positive price action could come as a disappointment to short sellers, considering short interest accounts for a healthy 7.4% of the stock's available float. What's more, it would take almost 19 sessions to cover these shorted shares, at NBS' average daily pace of trading.

Daily Chart of NBS Since January 2014

The CBOE Volatility Index (VIX) is up 1.1 points, or 8.6%, at 14.32. The market's "fear barometer" is on pace to notch its first close north of 14 since Nov. 5.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.94, as puts nearly double calls. SPY is down 0.5 point, or 0.2%.


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