Dow Jones Industrial Average Dip Doesn't Derail Stellar October

Has the VIX Dropped Too Far, Too Fast?

by Andrea Kramer

Published on Oct 30, 2015 at 11:58 AM
Updated on Oct 30, 2015 at 12:00 PM

The Dow Jones Industrial Average (DJIA) is struggling to pick up steam, as speculators weigh the latest earnings and economic data. On one hand, Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) are both cautiously higher after earnings, and the Chicago purchasing managers index (PMI) rebounded into positive territory in October. On the flip side, consumer spending increased by the smallest margin in eight months in September, and personal income rose by the slimmest amount since March. Nevertheless, October has been kind to the Dow and its index peers, which remain on pace for a fifth consecutive weekly gain, and their best month in four years.

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Among the stocks with notable option activity is Valeant Pharmaceuticals Intl Inc (NYSE:VRX), which is down 9.2% at $101.26, as traders weigh a conference call from Bill Ackman and the company's decision to cut ties with Philidor. Intraday option volume is running at almost triple the average clip, and puts are outpacing calls. It looks like some last-minute bears are betting on VRX to breach the century mark before today's close, buying to open weekly 10/30 100-strike puts.

One of the NYSE's top performers is professional networking name LinkedIn Corp (NYSE:LNKD), which is up 13% at $245.02 on solid earnings and upbeat analyst attention. The shares are now trading in territory not charted since before their May bear gap, barreling through resistance in the $220-$230 area. This neighborhood has contained LNKD's rally attempts for the past few months, and is home to the equity's 200-day moving average.

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Among the leading losers on the Big Board is satellite imagery provider DigitalGlobe Inc (NYSE:DGI), which has plummeted 24.7% to $14.98 -- and earlier touched a three-year low of $12.41 -- after the company reported unimpressive third-quarter sales and cut its full-year revenue forecast. The downbeat data prompted a downgrade to "market perform" at Raymond James, as well as a trio of price-target cuts. DGI is now more than 51% lower year-to-date.

The
CBOE Volatility Index (VIX) is up 0.1 point, or 0.6%, at 14.69.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.27, with puts having the edge over calls. At last check, SPY was 0.1 point, or 0.04%, lower at $208.75.


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