Dow Jones Industrial Average Dips; Nasdaq Notches Another Record

The $2.3M Options Trade on Tech

May 9, 2017 at 4:29 PM
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The Dow Jones Industrial Average (DJIA) spent the first part of the session cautiously higher, and the S&P 500 Index (SPX) and Nasdaq Composite (COMP) once again hit record highs, as investors digested the latest round of corporate earnings. However, the Dow and S&P turned decisively lower in afternoon trading, and the CBOE Volatility Index (VIX) rebounded off historic lows, amid reports that North Korea will proceed with another nuclear test. Nevertheless, it was another relatively quiet day for the Dow, and the tech-rich Nasdaq still notched a win. Elsewhere, Kansas City Fed President Esther George in a speech today said the Fed should continue to gradually increase interest rates, while Boston Fed President Eric Rosengren warned against major changes to Fannie Mae and Freddie Mac. Looking ahead, Snap stock could garner some buzz tomorrow, with the Snapchat parent scheduled to report earnings for the first time. 

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

  • The $2.3 million options hedge on the tech sector
  • How options traders reacted to record highs from Apple and Amazon. 
  • Wells Fargo: "Patient investors will be rewarded" by this stock. 
  • Plus, an automation stock with big upside; the stock Citron "loves" to short; and inside Valeant's big day. 

The Dow Jones Industrial Average (DJIA - 20,975.78) took a hit late in the session, falling 36.50 points, or 0.2%. Of the 11 Dow components that closed in the black, Nike had the best day, adding 1.1%. As for the 19 Dow losers, Chevron had the worst day, closing down 1.5%. 

The S&P 500 Index (SPX - 2,396.92) dropped 2.5 points, or 0.1%, after touching a record intraday high of 2,403.87. The Nasdaq Composite (COMP - 6,120.69) settled up 17.9 points, or 0.3%, after topping out at 6,133.

The CBOE Volatility Index (VIX - 9.96) bounced from its lows to pick up 0.2 point, or 1.9% -- but it was another sub-10 close for the "fear gauge."  

Closing Indexes Summary May 9
NYSE and Nasdaq Stats May 9


5 Items on Our Radar Today:
  1. The Department of Energy issued a state of emergency at the Hanford Nuclear Reservation in Washington state. Part of a tunnel containing nuclear waste collapsed, and workers were told to evacuate and "take cover." (The Washington Post)
  2. A handful of Democratic senators, including Elizabeth Warren, sent a letter to U.S. regulators, asking them to investigate famous investor Carl Icahn, who has served as an unpaid adviser for President Trump. The letter asked the agencies to investigate whether Icahn "violated insider trading laws" based on his "recent actions in the market for renewable fuel credits." (Reuters)
  3. Shares of this automation expert could be due for an extended rally. 
  4. Citron Research "loves the opportunity" to short this soaring e-commerce stock
  5. A closer look at Valeant stock's huge session. 

Corporate Earnings May 9
Unusual Options Activity May 9
Data courtesy of Trade-Alert

Commodities

Oil prices cooled today, after the Energy Information Administration (EIA) raised its forecast for U.S. production. The EIA also trimmed its forecast for average oil prices in 2017. June-dated crude futures fell 55 cents, or 1.2%, to end at $45.88 per barrel. 

Dollar-denominated gold prices also fell today, as the greenback strengthened. By the close, June-dated gold futures were down $11, or 0.9%, at $1,216.10 per ounce. 
 

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