Options Trading News

June 12, 2014  Thu 7:13 AM CT

Stocks are trying to rebound from yesterday's shallow pullback as investors prepare for monthly retail sales data. Oil is surging as Iraq continues to destabilize.

S&P 500 futures are up less than 0.1 percent, tracking gains of a similar magnitude in Europe. Asia was mostly lower overnight as Japan fell 0.6 percent and Chinese indexes posted smaller losses. India remained strong, advancing 0.4 percent.

Today is the busiest news day of the week, with retail sales and weekly jobless claims both due at 8:30 a.m. ET. Oil inventories follow two hours later. Europe already reported that industrial production rose 0.8 percent in April, topping estimates for a 0.5 percent gain. The World Cup also gets underway in Brazil, which is likely to draw attention to emerging markets. Japan's central bank announces monetary policy tonight.

But perhaps the biggest story is the spread of violence in Iraq, where Sunni Islamists took Saddam Hussein's hometown of Tikrit--one day after storming the country's No. 2 city of Mosul. Kurdish forces responded by seizing the oil hub of Kirkuk. The net result is a dramatic weakening of the Shiite-dominated government in Baghdad.

Oil is up 1.5 percent on the news, while gold and silver are rising by about half a percent.

The S&P 500 has fallen the last two sessions after breaking out to record highs in May. Gains have slowed among transportation stocks and large caps, which had previously led the advance, while smaller companies in the Russell 2000 have played catch-up. Energy and financials have been the strongest sectors in the last week, according to our researchLAB market-analysis tool, while emerging markets such as Brazil, Colombia, Russia, and India have rallied. Utilities, health care, and bonds have lagged.

In company-specific news, Restoration Hardware is ripping 15 percent after reporting strong quarterly results. Subscribers to our InsideOptions Pro service are poised to more than double their money thanks to a strategy cited on May 30. Lululemon Athletica fell 10 percent after guiding second-quarter earnings and sales below current consensus.

Geron is surging 35 percent after the Food and Drug Administration lifted a hold on studies of the company's imetelstat cancer drug. The news comes one day after bullish call buying in the company's December 3 calls. Hewlett-Packard is also gaining 1 percent on a Goldman Sachs upgrade and after the company released a new cloud-based computer system called The Machine.

In addition to the gains in energy and precious metals, grains are also inching higher. There are no big movers in foreign-exchange markets.
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