Bears Are Foiled Again as Stocks Bounce From Lows

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"While we once again experienced a lot of up-and-down price action, many sectors hadn't ventured far from their starting point by the closing bell" summarized Schaeffer's Senior Equity Analyst Joe Bell, CMT. "We experienced quite an intraday reversal, as the Dow Jones Industrial Average (DJI) finished more than 100 points off its lows. The market definitely showed a lot of resilience in the face of some early selling."

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

plus...
    Consumer sentiment hits a six-year high, Starbucks ( SBUX ) reports frothy earnings, and Herbalife ( HLF ) attracts long-term option bears.

The Dow Jones Industrial Average (DJI - 15,558.83) traded in a range between 15,560.97 and 15,405.16, ultimately closing just above the breakeven mark (and near its intraday peak), up 3.2 points, or less than 0.1%. On a weekly basis, the blue-chip index edged 0.1% higher, keeping its streak of weekly wins alive. Intel ( INTC ) and Travelers (TRV) led the Dow's 15 advancers with gains of 0.9% apiece, while Boeing (BA) and Hewlett-Packard (HPQ) sank 1% each to pace the 14 decliners. Cisco Systems ( CSCO ) was unchanged.

The S&P 500 Index (SPX - 1,691.65) fought its way back from an intraday low of 1,676.03 to close up 1.4 points, or 0.1%. Elsewhere, the Nasdaq Composite (COMP - 3,613.16) narrowly outperformed its index brethren once again, tacking on 8 points, or 0.2%. On the week, the SPX slipped fractionally lower, shedding 0.03%, while the COMP gained 0.7%.

The CBOE Market Volatility Index (VIX - 12.72) hit an intraday high of 13.73 -- briefly overtaking its 10-day moving average -- but closed down for the day as stocks reversed higher. By the close, the VIX was off 0.3 point, or 1.9%. This week, the fear barometer tacked on 1.4%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"This week was all about earnings, and there wasn't a great response from the latest round we saw," added Bell. "Next week, however, we have GDP figures, a Fed meeting, and the employment report for the month of July."

3 Things to Know About Today's Market :

  • The final July reading of the Thomson Reuters/University of Michigan's consumer sentiment index arrived at 85.1 -- up from a preliminary reading of 83.9, and exceeding consensus projections. The latest figure also marked a six-year high for the index. (MarketWatch)
  • Starbucks ( SBUX ) enjoyed an earnings-induced surge today, after revealing a 25% jump in fiscal third-quarter profits yesterday afternoon. The java giant posted earnings of $417.8 million, or 55 cents per share, which topped analysts' expectations for a profit of 53 cents per share. (Reuters)
  • Has Apple (AAPL) been dethroned as the world's most lucrative mobile handset provider ? According to Strategy Analytics, it certainly looks that way. The research firm found that Samsung's second-quarter operating profit for its handset unit arrived at $5.2 billion, versus Apple's profit of $4.6 billion. This is the first time the Korea-based company has outpaced its American rival. (CNBC)

5 Stocks We Were Watching Today :

  1. An earnings miss for Amazon.com (AMZN) didn't stop several analysts from raising their price targets on the stock.
  2. Outperforming Micron Technology (MU) attracted a rare crop of bearish near-term speculators.
  3. Zynga's (ZNGA) poorly received quarterly earnings report sparked a slew of downbeat brokerage notes.
  4. Call players rolled the dice on extended gains for Baidu.com (BIDU) over the next few months.
  5. Longer-term put buyers are unimpressed by Herbalife's ( HLF ) upward momentum.

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 :

Crude oil futures settled at a two-week low, amid worries about slowing demand in China. The September futures surrendered 79 cents, or 0.8%, to close the session at $104.70 per barrel. For the week, black gold lost 3.1%.

While gold futures ended the session in the red, they closed in positive territory for the third week in a row. The August contract shed $7.30, or 0.6%, to close at $1,321.50 per ounce. On a weekly basis, though, the precious metal added 2.2%.

SCHAEFFER'S MARKET POSTURE



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.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options

Referenced Stocks: CSCO , CSIQ , HLF , INTC , SBUX

Schaeffer's Investment Research

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