Dow Jones Industrial Average Set to Snap Weekly Winning Streak

Consumer sentiment surged to a near-eight-year peak in December

by Karee Venema

Published on Dec 12, 2014 at 11:49 AM
Updated on Apr 20, 2015 at 5:32 PM

The Dow Jones Industrial Average (INDEXDJX:DJI) is poised to snap its weekly winning streak. At last check, the 30-stock index was 201 points lower -- and on pace to log a 3.1% weekly loss -- as a continued slide in the energy sector overshadows a strong consumer sentiment reading. Specifically, January-dated crude has plunged 3.1% following another downbeat growth forecast, while consumer sentiment surged to a near-eight-year high in December. Elsewhere, the S&P 500 Index (SPX) is down 1%, while the Nasdaq Composite (COMP) is off 0.4%. The CBOE Volatility Index (VIX), meanwhile, is flirting with a 3.1% gain -- and on its way to notching a 74% weekly win.

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

Midday Market Stats

Among the stocks with notable call volume is freight issue Canadian Pacific Railway Limited (USA) (NYSE:CP). The stock is up 0.3% at $175.17, after Buckingham upped its outlook to "buy" from "neutral," and boosted its price target to $208. Year-to-date, the shares have added 15.8%, and today's options traders think there's more room to run. At last check, 4,536 calls had changed hands -- 11 times what's typically seen at this point in the day. The majority of the action has centered at CP's January 2015 180-strike call, with traders buying to open the contracts for a volume-weighted average price of $5.57.

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

Aerospace and defense issue Esterline Technologies Corporation (NYSE:ESL) is one of the biggest decliners on the Big Board. After being halted earlier, the equity was last seen down 14% at $100.90 -- and on the short-sale restricted (SSR) list -- after the company reported lower-than-expected fiscal fourth-quarter earnings last night. Today's plunge has pushed the stock back into the red on a year-to-date basis, and earlier, slipped below the century mark for the first time since early February. On the sentiment front, traders have displayed waning optimism toward the equity. In the options pits, the stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.89 ranks just 4 percentage points from an annual bearish peak. Elsewhere, it would take more than 11 sessions to cover all of ESL's shorted shares, at the security's average daily pace of trading.

One of the leading laggards on the Nasdaq is casino concern Caesars Entertainment Corp (NASDAQ:CZR). The security has surrendered 9.7% to churn near $13.39 -- and has been sent to the SSR list -- following reports that restructuring plans for Caesars Entertainment Operating Co., its largest unit, have come to a standstill. Amid today's bear gap, the stock seems to have found its footing atop its 50-day moving average -- a trendline that has served as both support and resistance in 2014. One group is likely cheering today's sell-off. At present, 42.1% of the equity's float is sold short, and it would take more than three weeks to cover these bearish bets, at CZR's average daily pace of trading.

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

The CBOE Volatility Index (VIX) is up 0.6 point, or 3.1%, at 20.70, and on pace to notch its first weekly close north of 20 since mid-October.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.09, with puts more than doubling calls. In fact, around 1.11 million SPY puts have crossed the tape at last check. SPY is down 1.9 points, or 0.9%, at $202.27.

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