U.S. stocks closed flat today as 10-year interest rates rebounded to 4.57% on a stronger than expected retail sales report for November; energy prices also moved higher. The Dow Jones (30 Industrials) added 2 points and the CBOE Volatility Index (VIX) fell 4% to 10.17. Airline issues traded actively on news of a bid by AirTran (AAI) for Midwest Air (MEH), and media reports of merger talks between Continental and United Air.
Options’ trading volume leaders included General Electric (GE) following yesterday’s announcement of a dividend increase, Altria (MO), and Wal-Mart (WMT), up 1%. Contact lens manufacturer Cooper Cos. (COO) fell 10% after the company reported disappointing Q4 results; Harrah’s (HET), down 2%, reacted to conjecture that the company might reject takeover bidders.
Active implied volatility gainers were led by HET, up 19%. Also higher was volatility for Ford (F), up 9%, and Red Hat (RHAT), up 9%. Volatility for CSX Corp. (CSX) rose 8% as the stock came under downgrade-related selling pressure.
Volatility decliners included Vertex Pharmaceuticals (VRTX), down 58%; time premiums had jumped yesterday ahead of the release of clinical trial results for its hepatitis C drug. A disappointing Q3 earnings’ report pushed shares of SAIC Inc. (SAI), 7% lower and implied volatility dropped 30%; the company authorized a 40 million share stock repurchase. Also lower was volatility for Marvell Technology (MRVL), down 12%, and COO, down 10%.
Note: Any stock or option symbols displayed are for informational purposes only and are not intended to portray a recommendation.
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