VIX Spikes as Stocks Stay Lower with Apple – Schaeffers Research (press release)

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Stocks are pulling back, with the Dow Jones Industrial Average (DJI) dropping more than 160 points at its intraday low — pressured by Apple’s (AAPL) iPhone X production concerns ahead of Thursday night’s earnings report. Plus, despite strong earnings from Lockheed Martin (LMT) and big M&A news in Keurig Green Mountain’s purchase of Dr Pepper Snapple (DPS), investors are focusing instead on this morning’s poorly received economic data and a surge in the 10-year Treasury yield, which broke to a three-year high above 2.7% earlier. Against this backdrop, the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) have joined the Dow in negative territory, while the CBOE Volatility Index (VIX) is pacing for its biggest one-day gain since Sept. 5.

Continue reading for more on today’s market, including:

  • 2 FAANG stocks at record highs before earnings.
  • Analysts take aim at Alibaba stock.
  • Plus, options traders eye big earnings move for one Dow stock; Editas stays hot; and a sinking Chinese stock.

One stock seeing unusual options activity today is Microsoft Corporation (NASDAQ:MSFT), as traders target the blue chip before earnings on Wednesday. Calls are crossing at two times the expected pace, and notable action is occurring at the weekly 2/2 100-strike call, where buy-to-open activity looks likely. These bulls would be wagering on MSFT stock rallying atop $100 by week’s end, when the contracts expire. Not only does this represent record-high territory for the security, but also upside of 6.4% from its current perch near $93.95.

One of the best Nasdaq stocks today is gene editing specialist Editas Medicine Inc (NASDAQ:EDIT). The shares have surged 13.5% today at $40.80, and while there’s no specific news behind the move, the equity has been making a series of higher lows and highs since June. EDIT stock earlier hit an annual high of $40.50, and now sports a year-to-date gain of 31.7%.

One big Nasdaq loser is Chinese gaming issue Inc (NASDAQ:SOHU), after the company reported a wider-than-expected quarterly loss and a weak sales outlook. SOHU stock was last seen down 15.9% at $38.95, extending the weakness that’s plagued it since it peaked above $70 in October. The shares are now testing the $40 level, right near their year-over-year breakeven level.

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