Dow Jones Industrial Average Backtracks Ahead of Fed Announcement

The Drug Stock Down 70%; Plus, Facebook Earnings Preview

Feb 1, 2017 at 12:03 PM
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The Dow Jones Industrial Average (DJIA) jumped higher out of the gate, but has since erased its lead and slid into the red as traders await this afternoon's announcement from the Federal Open Market Committee (FOMC), as the policy-making group wraps up its two-day meeting. While no interest-rate hike is expected this month, uncertainty is weighing on stocks following a round of largely upbeat economic data this morning, including a huge beat on private-sector jobs for January. Plus, the Markit manufacturing purchasing managers index (PMI) showed a nearly two-year high in growth for January, while the Institute for Supply Management (ISM) manufacturing index also beat expectations, with its highest result since late 2014. On the other hand, construction spending saw a surprise drop in December, while some automakers have reported disappointing U.S. sales for January. However, while the Dow and S&P 500 Index (SPX) have lost steam, the tech-rich Nasdaq Composite (COMP) is comfortably higher after an earnings win from Apple Inc. (NASDAQ:AAPL).

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Midday Market Stats February 1

Among the options with unusual options volume today is athletic apparel retailer Under Armour Inc (NYSE:UAA). A disappointing earnings result yesterday landed UAA on the short-sale restricted list, and was met with a round of bearish analyst attention today. As a result, UAA puts are trading at five times the typical intraday rate, with put volume on pace for an annual high. Leading the action so far is the weekly 2/3 20-strike put, where speculators appear to be purchasing new positions, betting on UAA to fall below the round $20 mark before the end of the week.

Semiconductor stock Advanced Micro Devices, Inc. (NASDAQ:AMD) is among the top performers on the Nasdaq, adding 12.8% to $11.69 following a well-received earnings report. The shares spent nearly all of 2016 barreling up the charts, and with today's bounce AMD is back above its previously supportive 20-day moving average, and sitting less than $1 shy of December's nine-year high. 

AMD Daily Chart February 1

Among the worst performers on the New York Stock Exchange at midday is autonomous driving concern Mobileye NV (NYSE:MBLY). A bearish brokerage note is weighing on the stock today, with the shares last seen off 1.5% at $42.31, paring their year-to-date lead to 11%. 

The CBOE Volatility Index (VIX) is up just 0.02 point, or 0.2%, at 12.01. 

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.38, with puts easily outnumbering calls. SPY was last seen off less than 0.1 point, or 0.05%, at $227.41. 

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