Dow Jones Industrial Average Trims Deficit Amid Greece Headlines

Is a Biotech Bubble About to Burst?

by Andrea Kramer

Published on Jul 6, 2015 at 12:00 PM

The Dow Jones Industrial Average (DJIA) dropped triple digits out of the gate, as traders digested Greek voters' rejection of creditors' bailout terms. However, U.S. stocks have since pared their losses -- and even flirted with positive territory -- perhaps encouraged by the resignation of Greek Finance Minister Yanis Varoufakis ahead of several key meetings of eurozone leaders. Traders may also be inspired by a rally among biotechs, a jump in the Institute for Supply Management's (ISM) services index, and the latest round of big-cap M&A action, headlined by Humana Inc (NYSE:HUM) -- and maybe even this weight management name.

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Among the stocks with notable options activity is Qihoo 360 Technology Co Ltd (NYSE:QIHU). Despite a rally in China, U.S.-listed shares of QIHU and its sector peers are lower at midday. Specifically, QIHU is down 5.1% at $63.87, after the firm said it retained a financial advisor to consider going private. Against this backdrop, QIHU puts are trading at three times the average intraday rate, with potential buy-to-open activity transpiring at the deep out-of-the-money September 55 put.

One of the top losers on the Nasdaq is commodity concern Horsehead Holding Corp. (NASDAQ:ZINC). The stock was last seen 16.8% lower at $9.53, and earlier touched a two-year low of $8.33, after BB&T downgraded the shares to "hold," citing disappointing production at the firm's Mooresboro, North Carolina, unit.

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One of the top gainers on the Nasdaq is biotech Versartis Inc (NASDAQ:VSAR). The equity is up 27.1% at $18.58, after the Food and Drug Administration removed a partial clinical hold on the firm's investigational drug application for VRS-317.

The CBOE Volatility Index (VIX) is up 0.6 point, or 3.7%, at 17.41.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.62, with puts more than doubling calls. At last check, the SPY was down 0.5 point, or 0.3%, at $206.80.


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