Stocks Cautiously Higher After Powell Testimony

The Fed Chair sees 'several years' of strong jobs ahead

Patrick Martin
Jul 17, 2018 at 11:54 AM
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Stocks have erased early losses today, as the Dow Jones Industrial Average (DJI) sits modestly higher amid an onslaught of earnings reports from the likes of Goldman Sachs (GS), Johnson & Johnson (JNJ), and UnitedHealth (UNH). The S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are cautiously higher as well, despite a sharp pullback from FAANG giant Netflix (NFLX) after earnings. Helping to stem the tide in the bulls' favor has been testimony from Fed Chair Jerome Powell, who told the Senate Banking Committee that the U.S. economy is on the brink of "several years" of strong employment and inflation near 2%, and that he supports "gradually raising the federal funds rate." 

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

  • Intel stock was hit with a downgrade ahead of earnings.
  • This drug stock is headed for its worst day since 2013.
  • Plus, options bears race to Nordstrom stock before earnings next month; and two Dow stocks with distinctly different post-earnings reactions.

MMC Market Stats July 17

One name seeing notable options trading today is Nordstrom, Inc. (NYSE:JWN), where more than 2,700 puts have traded -- five times what's typically seen at this point, and volume pacing for the 96th percentile of its annual range. Leading the charge today is the August 55 put, with over 2,300 contracts exchanged, and it seems options traders are hoping for another post-earnings move lower ahead of the company's report on Aug. 16 -- a day after August options expire. Nordstrom stock is down 1.1% to trade at $51.86 this morning, but has gained almost 10% year-to-date.

Johnson & Johnson (NYSE:JNJ) is the best Dow stock so far today, up 3.6% to trade at $129.21, after the pharma giant reported second-quarter earnings and revenue above analyst expectations, citing strong sales of its rare disease treatments and cancer drugs. While the Dow stock is now on track for its best day since January 2016, it has still shed 7.3% in 2018.

On the other end of the spectrum is UnitedHealth Group Inc (NYSE:UNH), the worst Dow stock today and down 3.5% to trade at $249.48, despite a second-quarter earnings beat. Traders are seemingly reacting to the insurer's medical loss ratio (MLR), which missed expectations. Nevertheless, UnitedHealth stock has gained 13% in 2018, and today's pullback has so far been contained by its 50-day moving average. 

MMC Daily Chart UNH


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