Stock market averages rallied at the open and are holding gains midday Monday following a round of mixed economic news. A report released early showed the NY Empire Index, a gauge of regional manufacturing activity, at only 1.0 for December. Economists were looking for a reading of 5.0. Productivity for the third quarter was up to an annual rate of 3 percent, compared to expectations of 2.7 percent. A third report on Industrial Production showed a 1.1 percent uptick for November, which was .7 percent more than expected. The mixed data failed to move Treasury bonds much and the yield on the ten-year note remains near 2.85 percent, ahead of the Fed?s highly-anticipated policy announcement Wednesday afternoon. Crude oil prices added 83 cents to $97.43 and gold gained $7.5 to $1242. Overseas, trading was mixed in Asia, but European markets are broadly higher, including a 1.7 percent advance in Germany?s DAX. On Wall Street, the Dow is up 135 and the NASDAQ added 30. CBOE Volatility Index (.VIX) edged down .11 to 15.65. Overall trading in the options market is active, with about 2.9 million calls and 2.1 million puts traded across the exchanges through 11:00 Eastern Time.
Volume Signals
Exxon Mobile (XOM) options volume is running 2X the (22-day) average, with 88,000 contracts traded and call volume accounting for 68 percent of the volume.
SPDR Consumer Staples ETF (XLP) options volume is 4.5X, the average daily, with 44,000 contracts traded and call option volume representing 84 percent of the activity.
Quicksilver (ZQK) options volume is running 5.5X the average daily, with 20,000 contracts traded and put volume accounting for 99 percent of the activity.
Increasing options activity is also being seen in NRG, Cubist Pharmaceuticals (CBST), and Red Hat (RHT)
Implied Volatility Mover
Implied volatility in the options on Avago Technologies (AVGO) is moving higher Monday. The stock is up $3.09, or 8.7 percent, to $48.81 on increasing volume of 7.4 million shares on news the company is buying rival LSI Logic, sending LSI shares soaring 38.5 percent. Meanwhile, options volume on AVGO is running 7X the daily average. 7,380 calls and 1,485 puts so far. December and January 50 strike calls are the most actives and 30-day implied volatility in the options on the stock is up 25 percent to 31.