Dow Jones Industrial Average Stages a Sharp Rebound; VIX Plummets

Both retail sales and weekly jobless claims beat consensus estimates

by Karee Venema

Published on Dec 11, 2014 at 11:47 AM
Updated on Jun 24, 2020 at 10:16 AM

After three consecutive days of losses, the Dow Jones Industrial Average (INDEXDJX:DJI) is in rally mode today -- up more than 200 points at last check. Sparking today's burst of buying power is a better-than-expected reading on retail sales data, as well as a wider-than-forecast drop in weekly jobless claims. Additionally, the four-week moving average of claims held south of the highly watched 300,000 mark for a 13th straight month. It's a similar set-up for the S&P 500 Index (SPX) and Nasdaq Composite (COMP), which have added a respective 1.4% and 1.5%. Amid the sharp rebound in the equities market, the CBOE Volatility Index (VIX) has plunged almost 12%. Elsewhere on the Street, crude oil fell to a fresh five-year low of $60.30 earlier, but the January-dated contract was more recently down 0.2% at $60.81 per barrel.

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

  • How to win at the options game, courtesy of Lululemon Athletica inc. (NASDAQ:LULU) traders.
  • Is it time to fade the VIX spike? Schaeffer's contributor Adam Warner crunches the numbers.
  • 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 drugmaker Neurocrine Biosciences, Inc. (NASDAQ:NBIX). The equity tagged a fresh eight-year high of $22.49 earlier -- and was last seen up 2% at $22.33 -- after yesterday's news of an expanded clinical pipeline prompted a price-target hike to $24 from $22 at J.P. Morgan Securities (with the firm also reiterating its "buy" rating). Today's positive price action is just more of the same for a stock that's doubled in value on a year-to-date basis. In spite of this, puts are trading at 19 times the intraday average today, with buy-to-open activity detected at NBIX's out-of-the-money January 2015 19 strike. Given the security's technical tenacity, a portion of this activity could be at the hands of shareholders protecting paper profits.

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

Over on the Big Board, home furnishings specialist Restoration Hardware Holdings Inc (NYSE:RH) is one of the biggest advancers. The equity is up 14.4% at $98.60 -- and earlier hit a record peak of $99.44 -- after its strong quarterly earnings report was met with a round of upwardly revised price targets. Nomura offered up the most optimistic outlook, boosting its target price by $10 to $110, while underscoring its "buy" recommendation. The stock has been a standout on the charts in 2014, and has rallied more than 44%. Should this momentum continue, a round of short covering could ensue. At present, one-third of the equity's float is sold short, representing nearly 11 sessions' worth of pent-up buying demand, at average daily trading volumes.

One of the leading gainers on the Nasdaq is retailer Urban Outfitters, Inc. (NASDAQ:URBN). The stock has surged 10.5% amid a sector-wide rally, and was last seen lingering near $33.16. What's more, URBN is on pace to close north of its 50-day moving average for the first time since Sept. 25. This trendline has been pressuring the shares lower in recent months, and quickly rejected the security's late-November rally attempts. Heading into today's session, the stock was staring at a 19% year-to-date deficit, yet option traders have kept the faith. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), URBN's 10-day call/put volume ratio of 5.47 ranks in the bullishly skewed 86th annual percentile.

Daily Chart of URBN Since January 2014 With 50-Day Moving Average

The CBOE Volatility Index (VIX) is down 2.2 points, or 11.9%, at 16.32, but appears to have found its footing atop the 16 mark.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.93, with puts nearly doubling calls. SPY is up 2.7 points, or 1.4%, at $205.95.


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