Strong Economic Data Has Dow Jones Industrial Average In the Black

Williams-Sonoma, Inc., Kirkland's, Inc., and Best Buy Co Inc are all seeing post-earnings upside

by Karee Venema

Published on Nov 20, 2014 at 11:36 AM
Updated on Apr 20, 2015 at 5:32 PM

After a slow start to the morning, U.S. markets have moved higher, as a round of upbeat economic reports at home overshadows disappointing data from across the pond. Specifically, factory activity in Philadelphia more than doubled the consensus estimate, while existing home sales and leading indicators for October both exceeded expectations. Additionally, jobless claims remained south of the highly watched 300,000 mark for a 10th consecutive week, while continuing claims fell to a 14-year low. At last check, the Dow Jones Industrial Average (INDEXDJX:DJI) is sitting 0.04% north of breakeven, the S&P 500 Index (SPX) is up 0.2%, while the Nasdaq Composite (COMP) is outperforming its peers with a 0.5% lead.

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

Midday Market Stats

Among the stocks with notable call volume is home furnishings retailer Williams-Sonoma, Inc. (NYSE:WSM). The stock has surged 9.5% -- and tagged a fresh record peak of $76.39 along the way -- to trade at $76.03, following a strong showing in the earnings confessional and subsequent round of bullish brokerage notes. Call volume has soared to 11 times what's typically seen at this point in the day, with a number of speculators closing out of their now in-the-money November 75 calls. Meanwhile, those looking for more upside through tomorrow's close are buying to open WSM's November 77.50 calls.

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

One of the major Nasdaq advancers is home decor specialist Kirkland's, Inc. (NASDAQ:KIRK). The stock has jumped nearly 17% to linger near $21.10, after unveiling a better-than-expected third-quarter earnings report. Today's bullish gap is sure to deal a blow to short sellers. At present, 9.5% of the equity's float is sold short, representing more than three weeks' worth of pent-up buying demand, at typical daily trading levels. Shorts may have been hedging with long calls ahead of the event, though, considering option traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 1.21 calls for each put on KIRK over the past 10 sessions.

Over on the Big Board, electronic retailer Best Buy Co Inc (NYSE:BBY) is one of the day's biggest gainers. The shares have tacked on 7.6% to trade at $38.24, following the company's successful turn in the earnings limelight. Call players were active on the stock ahead of this morning's scheduled event, as evidenced by BBY's 10-day ISE/CBOE/PHLX call/put volume ratio of 3.70, which ranks higher than 91% of similar readings taken in the past year. It's a trend continuing today, with calls crossing the tape at a rate 10 times the intraday average.

Daily Chart of BBY Since January 2014

The CBOE Volatility Index (VIX) is down 0.2 point, or 1.7%, and at risk of surrendering its short-term foothold atop its 10-day moving average.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.52, as puts outpace calls. SPY is up 0.4 point, or 0.2%, at $205.66.


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