Stocks extended gains, hitting fresh highs on the Dow, S&P 500 and NASDAQ for the first time since mid-January. The Russel 2000 broke out to fresh highs as well. News flow, however, was extremely quiet, volume was light and volatility was flat. There continues to be a firm bid underlying the market, and while there has been a lot of talk in the press about "capitulation buying", this doesn't seem to be taking place. Accumulation is slow and steady, not frantic or chased. Stocks continue to trade on the following three themes: strong earnings and higher forecasts; improving economic trends; and fund flows moving into equities.

The Dow Jones Industrial Average ended up 69.48 points, or 0.57%, to close at 12,161. The S&P 500 rose 8.18 points, or 0.62%, to close at 1319, and the NASDAQ was up 14.69 points, or 0.53%, to finish at 2783.

The CBOE Volatility IndexI:VIX closed up 2.20%, at 16.28 on overall put volume of 173,000 contracts compared to 265,000 call contracts, with April 25 calls as the most active series. 60 and 90-day implied volatility is at at 69 and 65, respectively, indicating decreasing price movement in the outer months.

SPDR S&P 500 ETF (SPY) - Get Report low February volatility and market upward momentum has traders accumulating puts to hedge against any downside move. SPY touched a 52-week high and to close higher by $0.82, at $131.97, on overall put volume of 956,000 contracts compared to 583,000 call contracts, with February 131 puts as the most active series. 60 and 90-day implied volatility is at 15, indicating non-directional price movement.

PowerShares QQQ Trust (QQQQ) traders continue to lean on puts resulting in lower implied volatility. The Qs also touched a 52-week high and trading higher by $0.28, at $57.65, on overall put volume of 216,000 contracts compared to 141,000 call contracts, with February 58 puts as the most active series. 60 and 90-day implied volatility is at 17 and 18, respectively, suggesting slightly higher price movement in the outer months.

Corn is trading at the highest level since July 2008 into the U.S. government report on February 9. Agriculture stocks option implied volatility are near their average as stocks trade at near-term highs. Potash (POT) overall option implied volatility of 33 is near its 26-week average; Agrium (AGU) overall option implied volatility of 33 is below its 26-week average of 36; Mosaic (MOS) - Get Report overall option implied volatility of 38 is below its 26-week average 42; CF Industries (CF) - Get Report overall option implied volatility of 41 is near its 26-week average 42; Intrepid Potash (IPI) - Get Report overall option implied volatility of 41 is near its 26-week average of 42; Monsanto (MON) overall option implied volatility of 31 is below its 26-week average of 34; Corn Products (CPO) overall option implied volatility of 35 is above its 26-week average 33; and Archer Daniels Midland (ADM) - Get Report overall option implied volatility of 28 is near its 26-week average of 28.

The following notable companies are reporting the week of February 7: Tuesday before the open: AGCO, AVP, AXL, BR, BZH, CNC, CVH, FIS, HGG, MNI, MT, NYX, SLE, SVVS, TEVA, TIN, TM, TWTC, UBS, VSH, WMG; after the close: AMX, ATML, AXS, AZPN, BGC, CERN, CSGS, DIS, ILMN, MFE, MOTR, NTGR, PBI, PRI, PTP, RNR, SWIR, TCK, TTWO, ULTI, XL; Wednesday before the open: AGU, ANR, ASCA, CSC, ICE, IR, JNY, KO, MICC, NOC, RL, SNY, SON, WYN; after the close: AKAM, ALL, AMKR, ARRS, ATVI, CSCO, ENH, EPIC, EQIX, KIM, MET, NUAN, PACR, PL, PRU, RE, RGC, SFSF, SWI, TLEO, TMRK, TMK, TQNT, WFMI, WSH; Thursday before the open: ALU, BCE, CBOE, CS, EXPE, GT, INCY, MFC, OZM, PEP, PM, PNX, RTP, S, SNN, SPR, TAP, TDC, THS, TRI; after the close: AB, ATHR, CEPH, CMG, CPKI, EXPE, FALC, GDOT, KFT, IM, O, PNRA, RAX, RNWK Friday before the open: BPO, CCE, DISCA, TOT

Economic Data for the week of February 7: Tuesday: Redbook, Three-Year Note Auction; Wednesday: MBA Mortgage Purchase Index, Crude Inventories, 10-Year Note Auction; Thursday: Initial Jobless Claims, December Wholesale Inventories, January Treasury Budget, 30-Bond Note Auction; Friday: International Trade, Consumer Sentiment.

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