Schwab: Be Cautious With Alibaba, Beware Speculative Biotech, Too

The Alibaba IPO gave the market a shot in the arm last week, yet individual investors should remain cautious of the untested stock, said Randy Frederick, Managing Director of Trading and Derivatives for the Schwab Center for Financial Research. Frederick added that investors need to worry about the internet retailer's ties to the Chinese government. He also said that Apple remains a major player when it comes to market sentiment and it's worth watching to see if it follows its familiar trading pattern in the wake of its latest new product launch. Finally, he said investors should use speculative money for biotech plays because of the volatility in the sector.