Dow Jones Industrial Average Slumps; Retail, Snap Earnings in Focus

Behind This Biotech Stock's 60% Surge

May 11, 2017 at 4:24 PM
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The Dow Jones Industrial Average (DJIA) ended lower for a third straight day, but was well off its session lows by the close. The S&P 500 Index (SPX) also settled in the red, as abysmal earnings out of the retail sector weighed on stocks. Specifically, Macy's made headlines after a major earnings miss, with Dillard's and Kohl's stocks also going downhill. Likewise, the Nasdaq Composite (COMP) halted a five-day winning streak, while Snapchat parent Snap's earnings debut left much to be desired. The failures in the earnings confessional overshadowed relatively upbeat economic data, and helped the CBOE Volatility Index (VIX) -- or the stock market's "fear gauge" -- rebound from historic lows

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

  • Behind this biotech stock's 60% surge. 
  • Amid today's retail earnings chaos, J C Penney options volume surged ahead of tomorrow's report. 
  • How options traders tripled their money on this video game stock.  
  • Plus, a low-cost strategy for options bulls; the beverage stock flashing "buy"; and 2 Dow stocks earning analyst accolades. 

The Dow Jones Industrial Average (DJIA - 20,919.42) was down more than 140 points at its session low, but ended on a slimmer 23.7-point, or 0.1%, drop. Eighteen of the Dow's 30 stocks ended lower, with Microsoft's 1.2% loss the worst. Apple and Exxon Mobil stocks led the bullish minority with 0.9% gains.

The S&P 500 Index (SPX - 2,394.44) gave back 5.2 points, or 0.2%. The Nasdaq Composite (COMP - 6,115.96) ended lower for the first session in six, dropping 13.2 points, or 0.2%. 

The CBOE Volatility Index (VIX - 10.60) edged 0.4 point, or 3.8%, higher, to close above its 10-day moving average for the first time since April 19. 

Closing Indexes Summary May 11
NYSE and Nasdaq Stats may 11


5 Items on Our Radar Today:
  1. President Trump defended his controversial decision to fire FBI Director James Comey, saying he would have canned Comey "regardless" of the Justice Department's recommendation. "He's a showboat, he's a grandstander, the FBI has been in turmoil," Trump told Lester Holt, adding that he "personally" isn't under investigation. (CNBC)
  2. Bloomberg's Consumer Comfort Index fell to a six-week low, though it stayed above 49 for an 11th straight week -- the longest since September 2001. Digging deeper, the national economy index fell by its biggest margin since November 2015, with survey participants likely rattled by weak first-quarter gross domestic product (GDP). (Bloomberg)
  3. This options strategy is a lower-cost alternative to buying calls. 
  4. History suggests it's time to buy the dip on Sodastream stock. 
  5. 2 blue chips that scored bullish analyst attention. 

Corporate Earnings May 11
Unusual Options Activity May 11
Data courtesy of Trade-Alert

Commodities

Oil prices continued yesterday's rebound, amid hopes for the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts at its May 25 meeting. By the close, June-dated crude futures were up 50 cents, or 1.1%, at $47.83 per barrel.

Gold futures also moved higher for a second straight day -- a feat not accomplished since late April -- amid a weaker dollar and renewed appetite for perceived safe havens. June-dated gold jumped $5.30, or 0.4%, to end at $1,224.20 an ounce.

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