Dow Jones Industrial Average Buoyed by Auto Sales, Construction Spending

Takeover rumors are swirling around BP plc (ADR)

Dec 2, 2014 at 11:48 AM
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The Dow Jones Industrial Average (INDEXDJX:DJI) has tacked on a solid 66.9 points, or 0.4%, thanks to generally better-than-expected November auto sales data. Construction spending figures for October also topped estimates, boosting sentiment around the Street. Also higher are the S&P 500 Index (SPX) and Nasdaq Composite (COMP), which have each added 0.5%. However, crude has resumed its downward spiral following yesterday's impressive rebound; at last check, the January-dated contract was 2.3% lower.

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

  • A proposal from the Obama administration has TASER International, Inc. (NASDAQ:TASR) on the rise, leading options traders to set their sights higher.
  • How concerned should we be about Black Friday sales? Schaeffer's contributor Adam Warner offers his two cents.
  • 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 energy firm BP plc (ADR) (NYSE:BP), which is up nearly 2% to trade at $40.59, on rumors of a potential Royal Dutch Shell buyout. So far, call volume is running at eight times the intraday norm, and outstrips put volume by a 14-to-1 margin. Digging deeper, buy-to-open activity can be detected at the weekly 12/5 39.50-, 40-, 40.50-, and 41-strike calls.

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

One of the major Nasdaq advancers is surveillance expert Digital Ally, Inc. (NASDAQ:DGLY), which -- similar to sector peer TASR -- has soared 42.5% to trade at $18.34, as President Obama urges Congress to provide body-worn cameras to law enforcement officials. Longer term, the shares have nearly doubled in value since the start of 2014. Nevertheless, short sellers have grown increasingly skeptical of DGLY, as short interest rose 9.2% during the last two reporting periods, and now represents almost one-quarter of the equity's float. However, at DGLY's average daily trading volume, it would take less than two sessions to cover these bearish bets.

Daily Chart of DGLY Since December 2013

Over on the Big Board, semiconductor stock Spansion Inc. (NYSE:CODE) has rallied nearly 24% to trade at $28.28 -- and earlier touched a record high of $28.73 -- on news of a $4 billion merger with Cypress Semiconductor Corporation (NASDAQ:CY). This is likely music to the ears of traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). During the last two weeks, speculators have bought to open 18.63 CODE calls for every put across this trio of exchanges.

The CBOE Volatility Index (VIX) is down 1 point, or 6.7%, to 13.33, but remains above its 10-day moving average, located at 13.22.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.00, with puts trading at double the rate of calls. SPY is up 1 point, or 0.5%, at $206.77.

 

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