Dow, S&P Bounce on Strong Earnings; Biotechs Weigh Nasdaq Down

Tax reform hopes also helped the DJIA and SPX higher

Oct 26, 2017 at 4:30 PM
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After suffering its worst day in weeks yesterday, the Dow Jones Industrial Average (DJIA) bounced to close higher in tandem with the S&P 500 Index (SPX), as traders cheered strong earnings from Twitter (TWTR) and Ford Motor (F). Meanwhile, hopes for tax reform surged after a narrowly passed budget in the House. Reports also circulated that President Trump narrowed his choices for the next Fed chair to Fed Governor Jerome Powell and Stanford University economist John Taylor, eliminating current Fed Chair Janet Yellen from the lineup.

It wasn't an all-out win on Wall Street today, however, as sinking biotech stocks weighed the Nasdaq Composite (IXIC) down. Several drug and pharmacy stocks dropped amid reports that Amazon (AMZN) has obtained pharmacy licenses in several states. AMZN will remain in the spotlight tonight, too, as the company and fellow FAANG member Alphabet (GOOGL) report earnings.

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

  • The sentiment siren sounding for the first time in 30 years.
  • 2 oil stocks to watch tomorrow.
  • How options traders are playing Apple's iPhone X sales launch.
  • Plus, a defense stock to watch next month; the retail stock ripe for a short-squeeze; and 3 stocks moving after earnings.

The Dow Jones Industrial Average (DJIA - 23,400.86) ended with a gain of 71.4 points, or 0.3%. Nike (NKE) led the 23 Dow gainers with a 3.4% gain, while 3M (MMM) paced the six losers with a 2% drop, and Chevron (CVX) ended flat.

The S&P 500 Index (SPX - 2,560.40) ended up 3.3 points, or 0.1%. The Nasdaq Composite (IXIC - 6,556.77) lost 7.1 points, or 0.1%.
 
The CBOE Volatility Index (VIX - 11.30) gained 0.07 point, or 0.6%.

Closing Indexes Summary Oct 26
NYSE and Nasdaq Stats Oct 26

5 Items on Our Radar Today

  1. It seems that Nike is joining Amazon in giving Lululemon a run for its money. The sports retail giant is reportedly looking to add new yoga pant studios to 5,000 of its stores on Nov. 1. (Bloomberg)
  2. Alphabet's Waymo announced it will begin test driving its autonomous cars in Michigan next week, to see how the vehicles perform in winter weather conditions like snow and ice. (Reuters)
  3. The defense stock known to outperform in November.
  4. Why Overstock.com shares could be due for a short squeeze.
  5. 3 stocks that tanked after earnings.


Corporate Earnings Oct 26

Unusual Options Activity Oct 26
Data courtesy of Trade-Alert

Commodities

Crude prices settled at a six-month high, erasing earlier losses, amid reports that Saudi Arabia's Crown Prince supports extending global production cuts. December-dated oil futures ended up 46 cents, or 0.9%, at $52.64 per barrel.

Gold ended lower today, and fell to a more than three-week intraday low, as the European Central Bank's bond-buying plans lifted the dollar. December-dated gold ended down $9.40, or 0.7%, at $1,269.60 an ounce.


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