Dow Dips Despite Bank Rally, Nike Earnings

Political uncertainty may have restricted U.S. stock movement

Josh Selway
Jun 30, 2017 at 3:18 PM
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Despite a bumpy week for stocks, the Dow Jones Industrial Average (DJIA) was able to extend its historic quarterly win streak. Oil prices were at the forefront once again, with crude futures bouncing from recent lows to end the week on a seven-session win streak. While the energy sector was able to recover, tech stocks struggled to get out of their recent funk -- especially after the European Union slapped Google with a record-breaking fine -- and a delayed vote on healthcare reform in the Senate also sapped investor confidence. As such, the Dow, Nasdaq Composite (COMP), and S&P 500 Index (SPX) are ready to close the week in the red.

Bank Stocks Rally After Stress Tests

Bank stocks did their best to lift the Dow throughout the week, after U.S. banks passed the latest stress tests from the Fed. The Financial Select Sector SPDR Fund (XLF) rallied as a result, much to the delight of bullish options traders. Even Capital One stock closed the week higher, despite the fact it has to resubmit its business plan. Elsewhere in the sector, Warren Buffett helped boost Bank of America shares. 

Tech Pullback a Buying Opportunity?

While the tech sector continued to underperform, there was still plenty to digest from this group. For example, Amazon stock is now flashing some bullish signals. Plus, buzz surrounding the e-commerce giant helped this fellow tech stock surge. On the other hand, one of the sector's hottest stocks got drilled by bearish analyst attention. Chip stocks are now facing unfavorable seasonality trends, as is this cloud stock, but the tech headwinds could be presenting a buying opportunity for FAANG stocks

Drugmakers Make Big Moves Once Again

Like tech, healthcare was a familiar face across Wall Street this week, as biotech stocks continued to make big moves. Most notably, Cara Therapeutics fell off a cliff following a huge run up the charts, as did Alder Biopharmaceuticals and Seattle Genetics., while an FDA approval sent this sector peer to new heights. Overall, the sector -- including fast-rising Valeant stock -- has been a recent favorite of options traders, and that trend could continue, since healthcare dominated our list of stocks to buy in July. 

Nike Earnings, Blue Apron IPO Make Headlines

A number of stocks made big moves after earnings, too. Homebuilder KB Home and beer stock Constellation Brands both hit new highs after their quarterly results. The most notable earnings winner, however, was Nike stock, which took off following better-than-expected results. Elsewhere, Altaba -- formerly Yahoo -- is starting to see increased options trading, Tiffany stock was named a top stock at BofA-Merrill Lynch, and this construction concern had its best day ever. Plus, investors kept a close eye on the Blue Apron IPO

Nonfarm Payrolls Highlight July 4 Week

Next week, the market closes early on Monday and is shuttered all day Tuesday for the Fourth of July holiday. Still, there'll be plenty to absorb as far as economic data goes, including the nonfarm payrolls report for June. As for stocks to watch, these Dow components could work for options bulls, while these two oil stocks are screaming "sell." Or you could avoid individual equities and buy ETFs. Either way, check out our write-up on weekly options first, and our beginner's guide to options pricing


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