120-Point Comeback Means Winning Week for the Dow

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"After the drop we saw the past two days, we had a very nice bounce," said Schaeffer's Senior Technical Strategist Ryan Detrick, CMT, on a day that saw the Dow Jones Industrial Average (DJI) fight back after a two-day slide to actually pull out a win for the week. It was a 120-point comeback for the Dow that pulled the index back above 14,000 for the second time this week. "It was nice to see small-caps take the lead again after getting crushed the past two days," Detrick added.

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

  • Our Senior Trading Analyst Bryan Sapp on what moved the markets upwards; plus, the latest outlook for Facebook ( FB ).
  • Schaeffer's Option Idea of the Week: KB Home ( KBH ), which has charged up the charts and could be a great candidate for a longer-term call play.
  • How option bulls zeroed in on Las Vegas Sands Corp. ( LVS ).
plus...
  • The markets get up off the mat after a two-day pounding, disappointing economic forecasts out of Europe, and how bulls are counting on eBay ( EBAY ) continuing its technical recovery.

The Dow Jones Industrial Average bounced off the mat after a heavy two-day drubbing to gain 120 points, or 0.9%, to close at 14,000.57. Of the 30 companies on the Dow, 25 advanced, led by computer maker Hewlett-Packard Company ( HPQ ), which climbed 12.3% after a positive earnings surprise. The five decliners were led by UnitedHealth Group (UNH), which dropped 1.4%. Today's charge helped the Dow finish the week up 0.1% and above 14,000 for the second time this week.

The S&P 500 Index (SPX) also picked itself up, gaining more than 13 points, or 0.9%, to close at 1,515.60 -- marking the 13th consecutive session the SPX has finished above the round-number barrier of 1,500. The SPX finished down 0.3% on the week. The Nasdaq Composite (COMP) rose 30 points (1%) to finish at 3,161.82. For the week, the COMP was down nearly 1%.

The CBOE Volatility Index (VIX) fell 1.1 points, or nearly 7%, to close at 14.17. The VIX finished the week up 13.7%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Now the one issue I have with today's bounce is volume was very light," Detrick said. "When you consider how heavy the volume was on the sell-off, today's light volume is very concerning under the surface. It was a very strange day as bonds also were higher. Usually when we have a big up day in equities, bonds tend to drop ... but not today."

3 Things to Know About Today's Market :

  • European Commission officials released a gloomy forecast for 2013 that called for the 17-nation region's economy to shrink for the second straight year. (Bloomberg)
  • Investors are not sinking as much money into stocks as they did last year -- for fear of a tightening of the money supply -- but Federal Reserve officials are signaling that its monetary stimulus programs will not be ending soon. (Los Angeles Times)
  • And Darden Restaurants (DRI), the folks who bring you Red Lobster and Olive Garden, cut its outlook for the year, saying the bad economy and higher payroll taxes are slowing traffic at their restaurants. (CBS News)

5 Stocks We Were Watching Today :

  1. Option players bet heavily on a short-term rebound by online retailer/auction site eBay Inc ( EBAY ).
  2. Some bearish investors in Texas Instruments (TXN) sold off their puts as the computer chip maker increased its dividend and expanded its stock-buyback program.
  3. Vertex Pharmaceuticals (VRTX) also saw bearish attention , with put buyers going against the grain both in terms of sentiment and technicals.
  4. An earnings-related stock rally for HomeAway, Inc. (AWAY) drew the attention of bulls today, with put trading above 13 times normal levels.
  5. A rebound from this week's huge fall by VeriFone Systems (PAY) didn't dissuade bearish put buyers, who flocked to the electronic payments company.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Most commodities were higher Friday, including crude futures, with oil for April delivery up 29 cents, or 0.3%, closing at $93.13 per barrel. On a weekly basis, however, crude shed 2.8%.

But gold declined, with the precious metal hitting a seven-month low amid uncertainty over the Fed's future policy plans. The April contract dropped $5.80, or 0.4%, to finish at $1,572.80 per ounce. For the week, gold gave up 2.3%.

SCHAEFFER'S MARKET POSTURE

At the end of every market day, the staff at Schaeffer's Investment Research reviews the trading day in detail, covering major events and key market developments. Don't miss this critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: EBAY , FB , HPQ , KBH , LVS

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