Monday was a relatively slow session, but stocks continue to have an underlying bid and closed up on the day. The big story was the snap-back rally in the financials, prompted by decent earnings out of Citigroup (C) - Get Report as well as a bit more comfort around the mortgage put-back/foreclosure problems. There was a late-day headline from Bloomberg, "Bank of America (BAC) - Get Report Plans to Revive Foreclosures", that helped give an extra lift to the tape into the close.
The Dow Jones Industrial Average ended up 80.91 points, or 0.73%, to close at 11,143. The S&P 500 rose 8.52 points, or 0.72%, to close at 1184, and the Nasdaq was up 11.89 points, or 0.48%, to finish at 2480.
The CBOE Volatility IndexI:VIX closed down $0.06, at $18.97. Overall put volume of 90,000 contracts compared to call volume of 162,000.
The SPDR S&P 500 ETF (SPY) - Get Report closed up $0.76, at $118.46, with overall put volume of 912,000 contracts traded compared to call volume of 486,000. November option implied volatility is at 20 and December is at 22, below its four-month average of 25. Active call volume suggests traders are adjusting positions for the market to continue to trend higher during earnings season.
The PowerShares QQQ Trust (QQQQ) closed up $0.06, at $51.55. Overall put volume of 388,000 contracts compared to call volume of 236,000, with October 52 calls as the most active series on 61,200 contracts. QQQQ November put option implied volatility is at 21 and December is at 23, below its three-month average of 26, suggesting decreasing price risk.
Financial Select Sector SPDR ETF (XLF) - Get Reportclosed up $0.14 to $14.67, on total put volume of 174,000 contracts versus call volume of 91,000. JPMorgan Chase (JPM) - Get Report has as 12.4% weighting in XLF, Wells Fargo (WFC) - Get Report 10.1%, Bank of America (BAC) - Get Report 9.4%, Goldman Sachs (GS) - Get Report 6.7% and Morgan Stanley (MS) - Get Report 3.6%.
Tuesday will be a heavy day for corporate earnings reports. The following notable companies are reporting before the bell: Bank of America (BAC) - Get Report, Bank of New York (BK) - Get Report, Peabody Energy (BTU) - Get Report, EMC (EMC) , Forest Labs (FRX) , Goldman Sachs (GS) - Get Report, Harley Davidson (HOG) - Get Report, Illinois Tool Works (ITW) - Get Report, Johnson & Johnson (JNJ) - Get Report, Coca-Cola (KO) - Get Report, Lockheed Martin (LMT) - Get Report, MGIC Investment (MTG) - Get Report, New York Times (NYT) - Get Report, Occidental Petroleum (OXY) - Get Report, Parker-Hannifin (PH) - Get Report, State Street (STT) - Get Report, Supervalu (SVU) and UnitedHealth (UNH) - Get Report; Earnings after the close: Altera (ALTR) - Get Report, Cree (CREE) - Get Report, Gilead (GILD) - Get Report,Intuitive Surgical (ISRG) - Get Report, Juniper (JNPR) - Get Report, Sallie Mae (SLM) - Get Report, Tupperware (TUP) - Get Report,Western Digital (WDC) - Get Report and Yahoo! (YHOO) .
The following economic data are expected for the remainder of the week of October 18: Tuesday: ICSC-Goldman Store Sales due out at 7:45 a.m. EDT, Housing Starts at 8:30 a.m. EDT, Redbook at 8:55 a.m. EDT and the Bank of Canada Announcement at 9:00 a.m. EDT; Wednesday: MBA Purchase Applications at 7:00 a.m. EDT, EIA Petroleum Status Report at 10:30 a.m. EDT and the Beige Book at 2:00 p.m. EDT; Thursday: Jobless Claims at 8:30 a.m. EDT, Philadelphia Fed Survey at 10:00 a.m. EDT and the EIA Natural Gas Report at 10:30 a.m. EDT. Friday: G20 finance ministers and central bank governors meet in Seoul, South Korea for the weekend.
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