Dow Jones Industrial Average Clings to Breakeven as Data Disappoints

How BlackBerry Ltd is taking on the Apple Inc. iPhone

Nov 26, 2014 at 11:55 AM
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The Dow Jones Industrial Average (INDEXDJX:DJI) has been clinging to the flatline this morning -- down a mere 6.2 points -- amid a mostly negative round of economic data. Durable goods orders unexpectedly rose last month, but the gains were largely powered by military spending -- calling into question the strength of business investment. Meanwhile, weekly jobless claims topped 300,000 for the first time since early September, and October new homes sales increased by a slimmer-than-anticipated margin. Elsewhere on the charts, the S&P 500 Index (SPX) and Nasdaq Composite (COMP) are both slightly in the black, up 1.4 points and 12.9 points, respectively. The COMP also notched a 14-year high of 4,776.95 just minutes ago.

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

  • How traders positioned themselves on BlackBerry Ltd (NASDAQ:BBRY) ahead of today's big announcement.
  • These two Internet search giants appear to be on a collision course.
  • 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 put volume is natural resources company BHP Billiton Limited (ADR) (NYSE:BHP), which is up 0.8% to trade at $55.62. Puts are crossing at 26 times the usual intraday pace, fueled by a surge in activity at the February 2015 47.50-strike put. Option traders are buying to open these out-of-the-money puts, where close to 16,300 contracts -- including a block of 12,500 -- are on the tape. In other words, these speculators anticipate fairly sizable losses from BHP over the next three months.

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

One of the major Nasdaq gainers is self-defense device maker TASER International, Inc. (NASDAQ:TASR), which has rallied nearly 7% to $21.99 amid continued rioting in Ferguson, Missouri, and another set of orders from the Winston-Salem Police Department. Earlier, in fact, the shares hit an almost 10-year high of $22.35, and are now up more than 38% in 2014. Despite TASR's technical tenacity, short sellers continue to be active, with short interest rising 8.1% during the most recent reporting period. Approximately 18% of TASR's float is now sold short, meaning there's plenty of cash on the sideline to fuel additional gains on potential short-covering activity.

Around midday, oil-and-gas name Seadrill Ltd (NYSE:SDRL) has forfeited roughly one-fifth of its value on a poorly received third-quarter earnings report and the suspension of its dividend payments. At last check, the stock was sitting at $16.58 -- down 60% year-to-date -- and earlier bottomed at a five-year low of $16.02. While shareholders are feeling the burn, options traders have been banking on losses in recent weeks. During the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SDRL has racked up a put/call volume ratio of 1.69, which ranks in the 80th percentile of its annual range. In other words, option players have bought to open puts over calls at an accelerated clip of late.

Daily Chart of SDRL Since January 2014

The CBOE Volatility Index (VIX) is off 0.2 point, or 1.7% -- putting the market's "fear gauge" at risk of finishing below 12 for the first time since late August.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.03, with puts and calls running about neck and neck. SPY is up 0.2 point, or 0.1%, at $207.30.


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