Dow Jones Industrial Average Enjoys Best 2-Day Stretch Since November

VIX Signal Flashing for First Time in 6 Years

Apr 25, 2017 at 4:32 PM
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A well-received round of corporate earnings sent stocks soaring today, with the Dow Jones Industrial Average (DJIA) notching its first back-to-back 200-plus-point gains since the two sessions following the November U.S. presidential election. Caterpillar and McDonald's stocks contributed the most to the big-cap index's rally. Not to be outdone, the S&P 500 Index (SPX) settled at its highest mark since March 1, and the Nasdaq Composite (COMP) made its inaugural trek north of 6,000. Traders also reacted to a mostly upbeat round of economic reports, and took a glass-half-full approach ahead of tomorrow's expected release of President Donald Trump's tax reform plan.

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

  • The VIX signal sounding for the first time since 2011.
  • Analyst: "Material risks" could cut Tesla stock in half.
  • How Twitter earnings could shock the shorts.
  • Plus, option traders take action ahead of tech earnings; 2 mining stocks with cheap options; and a rare downgrade for Amazon.

The Dow Jones Industrial Average (DJIA - 20,996.12) soared higher at the open and didn't look back, finishing with a 232.2-point, or 1.1%, win. Twenty-six of the 30 Dow components ended in positive territory, with CAT's 7.9% post-earnings surge leading the charge. Meanwhile, Verizon stock lost 0.7% to pace the four losers, and Nike shares closed flat. 

The S&P 500 Index (SPX - 2,388.61) roared 14.5 points, or 0.6%, for its second-highest close on record. The Nasdaq Composite (COMP - 6,025.49) conquered the 6,000 mark for the first time ever, topping out at a record best 6,036.02, before closing with a 41.7-point, or 0.7%, gain. 

The CBOE Volatility Index (VIX - 10.84), meanwhile, ended just 0.1 point, or 0.7%, lower. 

indexes closing summary april 25
nyse and nasdaq stats april 25

5 Items on Our Radar Today:

  1. At a contentious annual shareholder meeting today, Wells Fargo investors voted to keep all 15 board members. Support for the directors has been called into question in the wake of the bank's phony account scandal, with Chairman Stephen Sanger receiving just a 56% approval rating, compared to a typical 90%. (Reuters)
  2. The Trump administration is rumored to be seeking a corporate tax cut to 15% from 35%, with one estimate suggesting it would result in nearly $2 trillion in lost revenue over the next 10 years. House Speaker Paul Ryan has previously signaled his support for a cut to 20%. (Bloomberg)  
  3. With several tech heavyweights due to report earnings, options traders have been busy betting on higher highs for XLK.
  4. 2 mining stocks with cheap options ahead of earnings.
  5. An unusual bearish brokerage note didn't faze Amazon stock.

Corporate Earnings April 25
Unusual Options Activity April 25
Data courtesy of Trade-Alert

Commodities

Crude prices closed higher ahead of tomorrow's inventories update, which is expected to show a third straight week of declining U.S. stockpiles. Crude for June delivery settled up 33 cents, or 0.7%, at $49.56 per barrel, ending a six-session losing streak.

Amid another risk-on session for stocks, gold futures sold off -- even as the dollar retreated. At the close, June-dated gold was down $10.30, or 0.8%, at $1,267.20 an ounce, its lowest close since April 10.

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