Dow, S&P Hold On To Weekly Wins Despite Flynn Bombshell

Former national security advisor Michael Flynn could testify against President Trump

Patrick Martin
Dec 1, 2017 at 4:29 PM
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The Dow Jones Industrial Average (DJIA) was on track for another big win today, until the Michael Flynn news broke, sending the blue-chip index cratering by more than 350 points at its intraday low. The bombshell political news overshadowed cautious optimism over Senate Republican leader Mitch McConnell's belief that the GOP tax bill "has the votes." Stocks closed well off their session lows, though, with the Dow and S&P 500 Index (SPX) nabbing impressive weekly wins thanks to Thursday's breakout session. However, Wednesday's big tech selloff couldn't save the Nasdaq Composite (IXIC) from a weekly loss -- which sounded this rare stock alarm.

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

  • 3 reasons to buy calls on Netflix stock.
  • Options bears are flocking to this healthcare stock, which could be a big tax reform winner.
  • The tech stock that's crushing short sellers.
  • Plus, FDA decisions boost 2 drug stocks; volatility, gold traders react to Flynn news; and options volume pops on one Russia ETF.

The Dow Jones Industrial Average (DJIA - 24,231.59) finished 40.8 points, or 0.2%, lower, after being down more than 350 point at its intraday low. Merck (MRK) led 20 Dow stocks higher with its 1.1% win, while General Electric (GE) paced the 10 decliners with its 2.2% loss. The Dow notched its second straight weekly win, adding 2.9%.

The S&P 500 Index (SPX - 2,642.22) finished 5.4 points, or 0.2%, lower. For the week, the SPX added 1.5%. The Nasdaq Composite (IXIC - 6,847.59) lost 26.4 points, or 0.4%. For the week, it shed 0.6%.

The CBOE Volatility Index (VIX - 11.43) rose 0.2 point, or 1.3%. It also notched a gain of 18.2% this week.

Closing Indexes Summary Dec 1

NYSE and Nasdaq Dec 1

5 Items on Our Radar Today

  1. Amazon (AMZN) has reportedly initiated conversations with Mylan (MYL) and other drug manufacturers about possibly entering the pharmaceutical market. While the "high level" talks do not fully indicate Amazon's motives, the news sent drugstore stocks lower. The next indicators of Amazon's move would be filing pharmacy and drug licenses, according to analysts. (MarketWatch)
  2. Monthly car sales are in. While Fiat Chrysler (FCAU) and General Motors (GM) saw their sales decline in November, Ford Motor (F) rose. While sales still remain perched near last year's highs, it's likely U.S. auto sales will notch their first annual decline since the Great Recession. (USAToday)
  3. Food and Drug Administration (FDA) decisions spurred a rally from these 2 drug stocks
  4. The Flynn news had volatility and gold options traders in overdrive.
  5. Options volume on this Russia ETF were hot as the ruble dropped against the dollar.

Corporate Earnings Chart Dec 1

Unusual Options Activity Dec 1
Data courtesy of Trade-Alert

Commodities

Crude slated for January delivery added 96 cents, or 1.7%, to close at $58.36 per barrel, as optimism over the supply cut extension among global oil producers overshadowed a second straight weekly rise in the U.S. rig count. For the week, oil lost 1%, its largest weekly loss since early October.

February-dated gold futures jumped $5.60, or 0.4%, to settle at $1,282.30 an ounce, as both the dollar and stocks cooled amid rising political tension. For the week, gold shed 0.4%, comparing most-active contracts.


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