Stock market averages fell on a heavy news day. On the economic front, a report released early showed Jobless Claims declining by 2,000 to 386K last week. Economists were expecting to see a decline larger decline to 375K from 388K. Later, a report on Existing Home Sales was down to an annual rate of 4.48 million, which was a decline from 4.6 million in February and below expectations of 4.62 million. The Philadelphia Fed Survey fell to only 8.5 in April, from 12.5 in March and worse than the 10.3 that was expected. The only bright spot was the List of Leading Indicators for March, which was up .3 percent and .1 percent more than expected. Earnings are also in focus. Travelers (TRV) and Verizon (VZ) were the two of only three winners in the Dow Jones Industrial Average after profits topped expectations. BofA (BAC) erased early gains and finished down 1.7 percent. American Express (AXP), Qualcomm (QCOM), and EMCalso slipped on earnings news Thursday. The Dow Jones Industrial Average was only modestly lower at midday, but the selling picked up in afternoon action. Sharp losses across Eurozone equity markets and the options expiration exacerbated volatility a bit. At the bell, the Dow was down 69 points. A 3 percent loss in Apple (AAPL) weighed on the NASDAQ, which lost 23.9 points.
Bullish Trends
Blackstone Group (BX) lost 70 cents to $14.14 in active trading of 5.7 million shares after the New York-based asset manager posted disappointing quarterly earnings numbers Thursday. Options on the stock were busy as well. 59,000 calls and 4,300 puts traded in the name, which is 14X the daily average. Much of the call activity was due to one spread trade, in which the investor apparently sold 21,000 January 15 calls on BX at $1.14 per contract and bought 29,700 January 2014 $20 calls for 84 cents per contract. This diagonal ratio spread might roll a bullish position out one year and up 5 strike prices. It seems to express the view that the stock is likely to remain below $15 through January 2013, but then perhaps climb to more than $20 by January 2014. The stock has had a rough stretch in recent weeks and is now down 10.6 percent since January. A 52-week high of $19.49 per share dates back to April of last year.
Bullish trading was also seen in Sysco (SYY), Riverbed Technology (RVBD), and Pandora (P).
Bearish Trends
Cirrus Logic (CRUS) shares moved down 89 cents to $22.96 in active trading of 2.3 million shares and implied volatility in the options on the chipmaker moved higher on increasing put volume Thursday. 7,735 puts and 1,400 calls traded in Cirrus options today. The activity was in smaller sizes. The top trade was a 568-lot of May 24 puts traded on the $1.70 asking price. 2,720 CRUS March 24 puts changed hands total. May 21 and 22 puts were busy as well and levels of implied volatility in the options stock rose 18 percent to 58.5. The stock performed well during the first few months of the year and is up 45 percent year-to-date. The apparent put buying might be designed to help hedge recent profits in the stock ahead of the company's April 25 earnings release.
Bearish trading was also seen in Apollo (APOL), Career Education (CECO), and Level 3 (LVLT).
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Market Summary
Stock market averages fell on a heavy news day. On the economic front, a report released early showed Jobless Claims declining by 2,000 to 386K last week. Economists were expecting to see a decline larger decline to 375K from 388K. Later, a report on Existing Home Sales was down to an annual rate of 4.48 million, which was a decline from 4.6 million in February and below expectations of 4.62 million. The Philadelphia Fed Survey fell to only 8.5 in April, from 12.5 in March and worse than the 10.3 that was expected. The only bright spot was the List of Leading Indicators for March, which was up .3 percent and .1 percent more than expected. Earnings are also in focus. Travelers (TRV) and Verizon (VZ) were the two of only three winners in the Dow Jones Industrial Average after profits topped expectations. BofA (BAC) erased early gains and finished down 1.7 percent. American Express (AXP), Qualcomm (QCOM), and EMCalso slipped on earnings news Thursday. The Dow Jones Industrial Average was only modestly lower at midday, but the selling picked up in afternoon action. Sharp losses across Eurozone equity markets and the options expiration exacerbated volatility a bit. At the bell, the Dow was down 69 points. A 3 percent loss in Apple (AAPL) weighed on the NASDAQ, which lost 23.9 points.
Bullish Trends
Blackstone Group (BX) lost 70 cents to $14.14 in active trading of 5.7 million shares after the New York-based asset manager posted disappointing quarterly earnings numbers Thursday. Options on the stock were busy as well. 59,000 calls and 4,300 puts traded in the name, which is 14X the daily average. Much of the call activity was due to one spread trade, in which the investor apparently sold 21,000 January 15 calls on BX at $1.14 per contract and bought 29,700 January 2014 $20 calls for 84 cents per contract. This diagonal ratio spread might roll a bullish position out one year and up 5 strike prices. It seems to express the view that the stock is likely to remain below $15 through January 2013, but then perhaps climb to more than $20 by January 2014. The stock has had a rough stretch in recent weeks and is now down 10.6 percent since January. A 52-week high of $19.49 per share dates back to April of last year.
Bullish trading was also seen in Sysco (SYY), Riverbed Technology (RVBD), and Pandora (P).
Bearish Trends
Cirrus Logic (CRUS) shares moved down 89 cents to $22.96 in active trading of 2.3 million shares and implied volatility in the options on the chipmaker moved higher on increasing put volume Thursday. 7,735 puts and 1,400 calls traded in Cirrus options today. The activity was in smaller sizes. The top trade was a 568-lot of May 24 puts traded on the $1.70 asking price. 2,720 CRUS March 24 puts changed hands total. May 21 and 22 puts were busy as well and levels of implied volatility in the options stock rose 18 percent to 58.5. The stock performed well during the first few months of the year and is up 45 percent year-to-date. The apparent put buying might be designed to help hedge recent profits in the stock ahead of the company's April 25 earnings release.
Bearish trading was also seen in Apollo (APOL), Career Education (CECO), and Level 3 (LVLT).