Dow Jones Industrial Average Stares at Sixth Straight Loss

How Ackman Put $5.5 Billion in the Cookie Jar

by Andrea Kramer

Published on Aug 6, 2015 at 11:53 AM

Despite an early pop higher, the Dow Jones Industrial Average (DJIA) is on pace for its sixth straight loss. Once again, Walt Disney Co (NYSE:DIS) and oil are dragging the blue-chip barometer into the red, with the former extending its post-earnings slide -- and leading a broader media meltdown -- and the latter plumbing multi-month lows on oversupply concerns. The Nasdaq Composite (COMP) is faring even worse, due to some uninspiring earnings reports. Meanwhile, traders are digesting the latest jobs data ahead of tomorrow's highly anticipated nonfarm payrolls report -- which could have major rate-hike implications -- with weekly jobless claims once again on the rise, and Challenger, Gray & Christmas reporting a four-year high in July job cuts due to mass military layoffs.

 

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

  • While activist investor Bill Ackman may be sour on this alleged "pyramid scheme," he's sweet -- like, $5.5-billion-sweet -- on this cookie maker.
  • When it comes to statistics, consider the source: a lesson from Schaeffer's contributor Adam Warner.  
  • Plus ... Checking in on the CBOE Volatility Index (VIX), the SPDR S&P 500 ETF Trust (SPY), and other noteworthy stats at midday.

 

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Among the stocks with notable options activity is Tesla Motors Inc (NASDAQ:TSLA), with both calls and puts crossing at five times the intraday norm. In the wake of a poorly received earnings showing, the shares of the electric car concern have plunged 9.1% to sit at $245.62 -- on pace for their worst day of 2015 -- and option traders are placing eleventh-hour bets on where the stock will end the week. Weekly options expiring at tomorrow's close account for nine of the 10 most active TSLA contracts.

 

One of the top gainers on the Nasdaq is Merge Healthcare Inc. (NASDAQ:MRGE), thanks to a $1 billion buyout bid from Big Blue. International Business Machines Corp. (NYSE:IBM) will pay $7.13 per MRGE share -- nearly a 32% mark-up to the imaging specialist stock's close yesterday. At last check, MRGE has soared 30.4% to sit at $7.05, and just touched a three-year high of $7.09.

 

One of the top losers on the Nasdaq is coffee concern Keurig Green Mountain Inc (NASDAQ:GMCR), which has surrendered 28.4% to dock at $53.72, and earlier panned a two-year low of $52.40. Pressuring the shares are lackluster earnings and a subsequent round of negative analyst notes. GMCR is now 59% lower year-to-date, and sitting south of its 80-month trendline for the first time since October 2012.

 

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The CBOE Volatility Index (VIX) is on the mend after hitting an annual low yesterday, up 1.4 points, or 11.2%, at 13.91.

 

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.10, with puts doubling calls. The SPY was 1.2 points, or 0.6%, lower at $208.89, at last check. 


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