The DJIA pared its early lead as oil marks a new 12-year low
After starting the session on a positive note, the Dow Jones Industrial Average (DJIA) briefly turned negative -- and threatened to steepen its historically dreadful year-to-date deficit -- but is now modestly higher at midday. If another painful day in China wasn't enough to scare investors, dropping oil prices seem to be. February-dated crude was last seen below the $32-per-barrel level -- a 12-year low for the commodity. Looking ahead, Wall Street is preparing for the unofficial launch of earnings season, with Alcoa Inc (NYSE:AA) stepping up to the plate tonight.
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Among stocks with unusual option volume at midday is coal producer Peabody Energy Corporation (NYSE:BTU). BTU has dropped 17.8% to $5.48, after tapping an all-time low of $5.25 this morning, after sector peer Arch Coal Inc (NYSE:ACI) filed for Chapter 11 bankruptcy protection. This is more of the same for the stock, which marked a dismal 2015 with a 93% yearly loss. But option traders might be expecting some relief for the battered shares. BTU calls are crossing the tape at 20 times their typical intraday volume, and outnumbering puts more than 22-to-1. The resulting put/call volume ratio of 0.13 is lower than 97% of readings from the past year. Possible buy-to-open activity is being seen on the January 2017 and January 2018 5-strike calls.
Apollo Education Group Inc (NASDAQ:APOL) is among the top performers on the Nasdaq, popping 7% to $7.05, after the company reported earnings and said it is exploring strategic options. The shares hit a nearly 20-year low of $6.47 on Friday. There's plenty of room for future upgrades, too -- all seven brokerages following APOL currently rate it a "hold" or worse.
Among the worst performers on the Big Board today is Under Armour Inc (NYSE:UA) last seen down 7.4% at $69.42. The stock received a downgrade at Morgan Stanley this morning, likely eliciting cheers from bearish option traders. Even before today, UA was already in oversold territory, with a 14-day Relative Strength Index (RSI) of 27.
The CBOE Volatility Index (VIX) is down 1.6 points, or 6%, at 25.39.
Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.24, with puts more than doubling calls. SPY was last seen off 0.5 points, or 0.3%, at $191.41.