Dow Jones Industrial Average Futures Edge Higher Ahead of Healthcare Vote

2 Options Buying Ideas From an Underloved Sector

Kirra Fedyszyn
Mar 23, 2017 at 9:08 AM
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Dow Jones Industrial Average (DJIA) futures are seated modestly above fair value, with the index on pace to open just north of breakeven after five straight closes in the red. Traders are digesting an unexpected jump in weekly jobless claims, which totaled 258,000, compared to analysts' prediction of a slight drop to 240,000. Healthcare stocks will be in focus today, with traders exercising caution ahead of a key vote in the House of Representatives to repeal and replace the Affordable Care Act, better known as Obamacare. Plus, Fed Chair Janet Yellen is currently giving an opening address at the Fed's System Community Development Research Conference.
 
Continue reading for more on today's market, including:

  • 2 options buying opportunities from an underloved sector.
  • The analyst taking a swipe at airline stocks
  • Why short sellers are circling this Europe ETF
  • Plus, analyst attention boosts FireEye; a retailer breaks out on earnings; and Sears looks to continue its slide.

Dow Futures March 23

Futures on the Dow Jones Industrial Average (DJIA) are nearly 17 points above fair value.

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 754,341 call contracts traded on Wednesday, compared to 551,384 put contracts. The resultant single-session equity put/call ratio slid to 0.73, while the 21-day moving average inched higher to 0.65.
  2. Cybersecurity stock FireEye Inc (NASDAQ:FEYE) is booming 8.8% higher in pre-market trading, thanks to an upgrade to "buy" from "sell" at Goldman Sachs, which also raised its price target to $15 from $10, waxing optimistic on the company's recurring revenue growth. FEYE shares are set to open above the $12 mark and the 50-day moving average for the first time since their early February post-earnings bear gap.
  3. A quarterly earnings beat earned retail stock Five Below Inc (NASDAQ:FIVE) one price-target hike so far, and helped the shares tack on 6.9% ahead of the bell. Should these gains materialize, playing out a repeat of last quarter's post-earnings pop, the shares could break out of a tight consolidation beneath the 60-day moving average, which has kept FIVE stock in check for two months.
  4. It appears Sears Holdings Corp (NASDAQ:SHLD) will spend another day in the spotlight, with the stock set to drop 4% at the open following Wednesday's 12.3% loss. After the company expressed concerns about its ability to continue, Reuters revealed some suppliers are seeking to protect themselves by cutting down shipments and asking to renegotiate payment terms.
  5. New home sales will be released later today, while Minneapolis Fed President Neel Kashkari and Dallas Fed President Robert Kaplan are both due to speak. On the earnings front, Micron Technology (MU), Accenture (ACN), ConAgra (CAG), GameStop (GME), KB Home (KBH), and Shoe Carnival (SCVL) will report.

Buzz Stocks March 23

Overseas Trading

Ahead of the key congressional healthcare vote in the U.S. -- widely perceived as a gauge of President Trump's power -- Asian stocks edged higher, led by financial and industrial shares. Japan's Nikkei advanced 0.2%, even though the yen strengthened against the dollar for the eighth consecutive trading day. Meanwhile, China's Shanghai Composite added 0.1%, with airline stocks surging on M&A chatter between American Airlines and Guangzhou-based China Southern Airlines. Rounding things out, a 13% jump in Haier Electronics shares paced Hong Kong's Hang Seng, which settled a hair above breakeven, while South Korea's Kospi tacked on 0.2%.

European markets are faring well, led by post-earnings strength among retail stocks. On a related note, U.K. retail sales rose more than expected in February -- though London's FTSE 100 has little to show for it, up just 0.02%, following yesterday's deadly attack near the House of Parliament. Better off is Germany's DAX, which has jumped 0.4%, even as consumer sentiment unexpectedly fell, according to a GfK survey. France's CAC 40 is solidly higher, as well, last seen up 0.2%.

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