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Stock Market Futures Down on Underwhelming AAPL Presentation and Interest Rate Fears

stock market futures

Stock market today, Sept. 10, 2014: Stock market futures were down this morning after markets took a nosedive in the final hour of trading yesterday (Tuesday). The slide followed a broad selloff of tech giant Apple Inc. (Nasdaq: AAPL) and investors heightened cautions over a possible interest rate increase by the Federal Reserve sooner rather than later.

Here’s what you should know to make your Wednesday profitable:

Why Home Depot Stock (NYSE: HD) Rallied While Homebuilders Fell

The Home Depot Inc. (NYSE: HD) reported third-quarter business results on Tuesday and its management cited improved housing demand for their solid sales and earnings growth, particularly in the U.S. market.

Similarly, homebuilders Beazer Homes USA Inc. (NYSE: BZH) and D. R. Horton Inc. (NYSE: DHI) reported fourth-quarter earnings Monday, which, according to each company's management, reflected a continued U.S. housing market recovery.

Despite improved earnings for fiscal 2012 and a positive outlook for fiscal 2013, shares of Beazer and D.R. Horton were off sharply in afternoon trading on Monday, with BZH down about 17% and DHI 6%. They recovered slightly by Tuesday afternoon.

Home Depot, on the other hand, has rallied sharply on Tuesday, hitting a new 12-year high and closing in on its all-time high of $70, set back in April 2000.

What accounts for the remarkable divergence between the homebuilders and Home Depot?

The answer comes down to comments made by Donald J. Tomnitz, Vice-Chairman, Chief Executive Officer, President and Member of the Executive Committee for D.R. Horton.

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Options Strategy: How a Home Depot (NYSE: HD) Straddle Could Provide Investors Lower Costs, Higher Returns

After more than two years of false starts, the battered U.S. housing market may have finally found a bottom.

If so, that prospect offers options investors a chance to earn higher returns on lower costs using a Home Depot (NYSE: HD) straddle. (More on that later...)

In fact, here are just a few of the latest statistics that lead me to believe housing will slowly begin to recover over the next four months...

  • Rates for all types of mortgage loans hit record lows this month, with the benchmark 30-year fixed mortgage being offered at 3.88% last week.
  • And finally, last Wednesday, members of the National Association of Home Builders (NAHB) expressed their highest level of confidence in the housing market since June 2007 - the fourth consecutive month that sentiment levels have risen.
So, given the increasingly positive outlook for the housing market, the real question becomes: How can investors use this opportunity to their advantage in the first half of 2012?...

The answer is an options strategy that offers lower risk and potentially higher rewards.

How to the Play the Housing Market Bottom

Now typically, stocks that rise or fall with the tides of the housing market fall into three categories:

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