Dow Jones Industrial Average Battles Back Amid Energy Rally

The Patent Drama Plaguing GoPro

by Andrea Kramer

Published on Nov 3, 2015 at 12:04 PM

The Dow Jones Industrial Average (DJIA) got off to a bumpy start, but has since resumed its journey into positive year-to-date territory. Likewise, the S&P 500 Index (SPX) is extending its trek north of 2,100, after spending much of the morning in the red. Energy issues are leading the charge, with crude oil climbing on news of an oil-worker strike in Brazil. Traders are seemingly shrugging off a slightly steeper-than-expected drop in September factory orders and a stronger dollar, though the real test will come with Fed Chair Janet Yellen's testimony tomorrow, which precedes Friday's highly anticipated nonfarm payrolls report

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Among the stocks with notable option activity is Wendy's Co (NYSE:WEN), which is down 1.3% at $9.60 ahead of tomorrow morning's earnings release. It looks like some options players are betting on an earnings win for the fast-food concern, with intraday call volume running at 36 times the average clip. Most of the action is attributable to a large block of January 2016 12-strike calls, which were seemingly bought to open. Meanwhile, RBC is giving mixed signals; the brokerage firm upgraded WEN to "outperform" from "sector perform," but trimmed its price target by $1 to $11.

One of the NYSE's top performers is "Candy Crush" maker King Digital Entertainment PLC (NYSE:KING), which is up 14.1% at $17.73, after Activision Blizzard, Inc. (NASDAQ:ATVI) announced plans to buy the firm for $5.9 billion.

Among the leading losers on the Nasdaq is drugmaker AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), which has dropped 19.5% to $33.12, and earlier touched an annual low of $28.48. Pressuring the shares was a weaker-than-expected earnings showing, on top of lackluster full-year guidance. AMAG has now given up more than half its value since touching an all-time best of $77.73 in mid-July, and is poised to close the week beneath its 100-week moving average -- a trendline that's acted as both support and resistance since early 2013.

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The CBOE Volatility Index (VIX) is down 0.1 point, or 0.9%, at 14.02. The "fear gauge" hasn't closed below 14 since before the August sell-off.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.46, with puts handily exceeding calls. At last check, SPY was 0.4 point, or 0.2%, higher at $210.81.


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