Dow Jones Industrial Average, S&P Hit Highs; Financial Shares Surge on Yellen

'Buy the Dip' on These 2 Stocks

Feb 14, 2017 at 4:23 PM
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The Dow Jones Industrial Average (DJIA), S&P 500 Index (SPX), and Nasdaq Composite (COMP) all hit record highs today, after Fed Chair Janet Yellen waxed optimistic about the economy during her congressional testimony. Of particular note, Yellen left the door wide open to a March rate hike. Dallas Fed President Robert Kaplan struck a similarly hawkish tone -- calling for a rate hike "sooner rather than later" -- though Atlanta Fed President Dennis Lockhart said he doesn't see "compelling reasons" for lift off just yet. With interest rates seemingly destined for a bump, though, financial stocks led the way higher, while rate-sensitive sectors like real estate and utilities struggled.

Continue reading for more on today's market, including: 

  • "Buy the dip" on these 2 stocks, says Schaeffer's Senior Options Strategist Tony Venosa, CMT.
  • 3 auto stocks taking traders on a wild ride.
  • Yellen powered this financial ETF to nine-year highs, while these components flashed buy signals.
  • Plus, a big bet on Freeport-McMoRan, key levels on Cisco, and Groupon earnings on deck.

The Dow Jones Industrial Average (DJIA 20,504.41) settled at its highest mark of the day, adding 92.3 points, or 0.5%, to secure its fourth straight record close. Twenty-three of 30 Dow stocks ended higher, paced by JPMorgan Chase & Co.'s (NYSE:JPM) 1.6% advance. Of the seven losers, Verizon Communications Inc. (NYSE:VZ) was the worst performer, shedding 0.6%.

The S&P 500 Index (SPX - 2,337.58added 9.3 points, or 0.4%, and settled at its loftiest level of the session. The Nasdaq Composite (COMP - 5,782.57) tacked on 18.6 points, or 0.3%, after earlier peaking at 5,783.09 . Both indexes notched their fourth consecutive closing highs, as well.

The CBOE Volatility Index (VIX - 10.74) slid 0.3 point, or 3%, for its lowest settlement since Jan. 27.

Indexes closing summary February 14
NYSE and NASDAQ stats February 14

5 Items on Our Radar Today

  1. Insurers Aetna Inc (NYSE:AET) and Humana Inc (NYSE:HUM) called off a $34 billion merger agreement, roughly three weeks after a federal judge sided with the Justice Department, blocking the deal on antitrust concerns. Per the agreement's terms, AET will pay HUM a $1 billion breakup fee. Meanwhile, CIGNA Corporation (NYSE:CI) just walked away from its proposed merger with Anthem Inc (NYSE:ANTM), and subsequently sued its rival for $13 billion. (Reuters; Business Insider)
  2. Engaged Capital is pushing Rent-A-Center (NASDAQ:RCII) to sell itself, due to its sliding stock price. In a letter, the activist investor, which owns a nearly 13% stake in the rent-to-own business, accused RCII's board of being "asleep at the wheel as the operating performance of the company deteriorated over the past few years." (The Dallas Morning News)
  3. The six-figure bearish options trade on Freeport-McMoRan Inc (NYSE:FCX).
  4. Technical levels to watch ahead of Cisco Systems, Inc. (NASDAQ:CSCO) earnings.
  5. Groupon Inc (NASDAQ:GRPN) traders are bracing for another sharp earnings swing.

Quarterly Earnings February 14
Unusual Options Activity February 14
Data courtesy of Trade-Alert


An early rally in oil prices moderated, as the dollar strengthened on rate-hike chatter and concerns emerged that U.S. shale output could offset a global production cut among members and non-members of the Organization of the Petroleum Exporting Countries (OPEC). March-dated crude futures added 27 cents, or 0.5%, to settle at $53.20 per barrel.

Gold suffered its fourth straight daily loss, as a hawkish Yellen bolstered the dollar. By the close, April-dated gold futures were down just 40 cents at $1,225.40 per ounce.

Get your daily dose of Dow futures, stock news, and more with Schaeffer's Opening View.



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