Dow Jones Industrial Average Struggles on Weak Data, UPS

United Parcel Service, Inc. (UPS) is sharply lower following a disappointing fourth-quarter forecast

Jan 23, 2015 at 11:55 AM
facebook twitter linkedin

Despite signaling a positive start to the session ahead of the bell, the Dow Jones Industrial Average (INDEXDJX:DJI) has spent the entire morning churning south of breakeven. Traders appear to be reacting to a pair of uninspiring economic reports; specifically, a slightly less-than-expected rise in existing home sales, and a surprise dip in Markit's manufacturing purchasing managers index flash reading for January. Additionally, a weak fourth-quarter outlook from shipping giant United Parcel Service, Inc. (NYSE:UPS) is overshadowing well-received results from General Electric Company (NYSE:GE). Against this backdrop, the DJI was last seen down 58 points, or 0.3%, but still on pace to snap its weekly losing streak.

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

Midday Market Stats

Among the stocks with notable put volume is Dreamworks Animation Skg Inc (NASDAQ:DWA), with the contracts crossing the tape at 113 times the average intraday pace. The stock has plunged 8.7% to trade at $19.45 -- and earlier hit an annual low of $18.30 -- after the filmmaker's restructuring efforts received a pair of bearish brokerage notes. Options traders are buying to open DWA's June 16 put -- easily the stock's most active strike -- to bet on more downside over the next five months.

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

Ocwen Financial Corp (NYSE:OCN) is one of the leading laggards on the Big Board, after BlueMountain Capital said it was shorting the shares, explaining the mortgage loan firm's recent troubles with the law have put it in a position of default. At midday, shares of OCN are down 9.5% at $6.92, bringing their year-to-date loss to 54%.

Daily Chart OCN Since December 2014

Fiber optics specialist Infinera Corp. (NASDAQ:INFN) is one of the biggest advancers on the Nasdaq, after the firm's better-than-expected fourth-quarter earnings report was met with a round of bullish brokerage attention. At last check, the stock was up 18.1% at $17.00, after earlier hitting a seven-year peak of $17.49. A continued rise could have short sellers hitting the exits en masse. Short interest accounts for 12.1% of the stock's available float, and it would take more than two weeks to cover these shorted shares, at INFN's average daily pace of trading.

The CBOE Volatility Index (VIX) is down 0.3 point, or 1.7%, at 16.12. The market's "fear gauge" is on pace for a 23% week-over-week loss.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.95, with puts almost doubling calls. At last check, SPY is down 0.4 point, or 0.2%, at $205.68.




These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!


Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners