Dow Jones Industrial Average Headed for Weekly Loss

Are These 3 Biotechs About to Burst?

by Karee Venema

Published on Jul 24, 2015 at 11:58 AM
Updated on Jul 24, 2015 at 12:01 PM

The Dow Jones Industrial Average (DJIA) peaked above breakeven in early trading, thanks to an earnings-related boost from one notable blue chip. However, the day's bullish bias sputtered after a report showed new home sales skidded to their slowest pace in seven months in June. Elsewhere, a brow-raising reaction to, Inc. (NASDAQ:AMZN) earnings is failing to lift the Nasdaq Composite (COMP), and thanks to a week's worth of mostly cold quarterly reports, both the DJIA and COMP are headed for weekly losses. Meanwhile, crude and gold continue to get crushed, with the former on pace for a fourth weekly drop and the latter set for its worst weekly drop since October. Looking ahead, tech earnings will continue to be in focus next week, as will a big central bank meeting.


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Among the stocks with notable option activity is Starbucks Corporation (NASDAQ:SBUX), with the contracts crossing at six times the average intraday pace. The stock is up 1.7% at $57.49 -- and fresh off a record high of $59.31 -- thanks to the coffee concern's strong showing in the earnings confessional and subsequent round of bullish brokerage notes. Meanwhile, it appears speculators could be selling to open the October 57.50 put to bet on a longer-term floor, and initiating new short positions at the weekly 7/24 59-strike call to gamble on a very short-term ceiling.


The biggest loser on the Nasdaq is TrueCar Inc (NASDAQ:TRUE), which is off 38% at $6.64, after earlier bottoming at an all-time low of $6.15. Sparking the day's sell-off is a dreary current-quarter and full-year outlook, as well as some bearish backlash from the brokerage bunch. Year-to-date, shares of the car pricing name are down 71%.


One of the top gainers on the Big Board is Pandora Media Inc (NYSE:P). The security has surged 13.6% to $15.77, after the satellite radio issue posted better-than-expected earnings and raised its full-year guidance. However, today's bull gap is being contained by P's 120-day moving average -- a trendline that supported pullbacks in late April and early June.



The CBOE Volatility Index (VIX) is up 0.7 point, or 5.6%, at 13.34 -- bringing its week-to-date gain to 11.6%.


Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.12, with puts more than doubling calls. SPY is down 0.8 point, or 0.4%, at $209.39.



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