Saturday, September 18, 2010

Oracle lifts Nasdaq as options expiration arrives

NEW YORK: The Nasdaq rose on Friday, Sept 17 after reassuring earnings and an upbeat outlook from Oracle, with the broader market flat as the traditional trading volatility expected by the expiration of options failed to materialize.

Oracle Corp, the world's No. 3 software maker, jumped 8.3 pct to $27.46, and led the Nasdaq higher after it posted better-than-expected results and gave an outlook that topped Wall Street's forecasts.

The close of trading on Friday marked the quarterly expiration of September equity futures and option contracts, a convergence known as "quadruple witching," which tends to increase volume and swings in trades. Strategists said trading was relatively subdued, however, heading into the close.

"A lot of folks were surprised -- they were hoping they might get a little more volatility due to the quadruple witching and maybe that might create some trading opportunities, but they've been disappointed," said Bernie McSherry, director of strategic initiatives at Cuttone & Company in New York.

"The market has been fairly flat and volume has not really been up to levels that people were hoping for."

The S&P 500 managed to overcome briefly key technical resistance around 1,130, pushing through intraday highs from June and August. A decisive move above that level on solid volume would be a bullish sign.

The Dow Jones industrial average gained 13.02 points, or 0.12 percent, to 10,607.85. The Standard & Poor's 500 Index added 0.93 points, or 0.08 percent, to 1,125.59. The Nasdaq Composite Index climbed 12.36 points, or 0.54 percent, to 2,315.61.

For the week, the Dow rose 1.4 percent, the S&P 500 gained 1.5 percent and the Nasdaq gained 3.3 percent.

Support for the S&P 500's 200-day moving average remains around 1,116, a level it vaulted on Monday.

Texas Instruments Inc gained 3 percent to $25.73 after the chipmaker increased its stock repurchase program and boosted its quarterly dividend by 8 percent.

Research in Motion Ltd advanced 0.3 percent to $46.64, giving up most of its early gains as analysts mostly cut share price targets for the BlackBerry maker, focusing on tough competition and a weak U.S. performance rather than RIM's robust results.

The option expirations meant options trading had its busiest day in a year on Thursday, led by a surge in call trades. The total put-to-call ratio, often used to gauge market sentiment, fell to its lowest level since Dec. 24, 2009, according to Scott Fullman, director of derivative investment strategy at WJB Capital Group.

Volume was light with about 8.3 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's estimated daily average of 9.65 billion.

Advancing stocks outnumbered declining ones on the NYSE by three to two, while on the Nasdaq, advancers beat decliners about four to three. - Reuters

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