Shaking off the weather-related two-day lapse in trading, the
Dow Jones Industrial Average (DJI)
endured a rather up-and-down session, dipping to a slim loss at the
closing bell. "The market opened up without a hitch and trading
resumed just fine," noted Schaeffer's Senior Technical Strategist
Ryan Detrick. "But while we came out of the gate with higher
prices, the market eventually sold off once again. We've noted how
price action is rather bearish, while various sentiment indicators
are flashing extreme levels of skepticism. This doesn't mean we
will bottom and rally, but it does improve the odds of a stellar
rally on any good news," said Detrick. "Now, we just need some good
news."
Chart of the Day
: Schaeffer's Senior Options Strategist Tony Venosa, CMT, shares
8 reasons to go long on Yum! Brands (
YUM
)
.
Daily Game Plan
: Schaeffer's Senior Trading Analyst Bryan Sapp has the
levels to watch and news to follow
in tomorrow's trading.
And now, a look at the numbers...
The markets see-sawed throughout the session, starting the day
with moderate gains as investors enthusiastically returned from a
two-day trading break. By lunchtime, however, stocks were in
negative territory, only to pop back near breakeven shortly before
the close. It was ultimately a mixed and uninspiring finish, as the
Dow was just shy of breakeven, the S&P 500 Index (SPX) closed
fractionally higher, and the tech-rich Nasdaq Composite (COMP) gave
back roughly 0.4%. For the month, the Dow retreated 2.5%, the SPX
shed 2%, and the COMP brought up the rear with a 4.5% drop.
The CBOE Market Volatility Index (VIX), meanwhile, rallied
sharply on the day and surged 18.2% for the month. The index
continues to drift below its 20-month moving average, however,
which has contained all but one monthly close since last
November.
Today's highlight
: "You have to hand it to both Ford (
F
) and General Motors (
GM
), as both soared on some nice earnings. Still, earnings across the
board have been rather disappointing," said Detrick.
"Nonetheless, the mergers and acquisitions activity continues to
show there are some great values out there. First off, Walt Disney
(DIS) bought Lucasfilm for more than $4 billion, making George
Lucas the second-largest holder of DIS shares." Detrick continued,
"Then, PVH Corp. (PVH) paid a 38% premium, or $2.9 billion, for
Warnaco (WRC). Things are scary and the economy continues to
weaken, but most of that is factored in. EVERYONE knew this
earnings season would be bad. I'm more encouraged by the fact we
continue to see M&A activity for some huge premiums."
More of today's big stories:
-
Tablet Showdown
: Apple Inc. (NASDAQ:
AAPL
), Amazon.com, Inc. (NASDAQ:
AMZN
), Microsoft Corporation (NASDAQ:
MSFT
), and Google Inc (NASDAQ:
GOOG
).
- Facebook Inc (NASDAQ:
FB
) could enjoy
continued upside
in the short term.
- Ctrip.com International, Ltd. (ADR) (NASDAQ:
CTRP
) garnered an
upbeat note
from Goldman Sachs, while Electronic Arts Inc. (NASDAQ:
EA
) was tapped with a pair of
earnings-induced price-target adjustments
.
- Weekly option players
picked up contracts
on Netflix, Inc. (NASDAQ:
NFLX
).
- Sohu.com Inc. (NASDAQ:
SOHU
) saw a surge in
pre-earnings options activity
.
-
Most-Active Options Update
: Cisco Systems, Inc. (NASDAQ:
CSCO
), Sprint Nextel Corporation (NYSE:
S
), and General Electric Company (NYSE:
GE
).
And, in case you missed it
... Four outperforming credit services names that are
poised to charge higher
.
For today's activity in commodities, options, and more, head
to page 2.
Commodities markets:
Oil posted an advance on the day, rising 56 cents, or 0.7%, from
yesterday's final settlement to close at $86.24 a barrel. October
was a rough spell for black gold, which surrendered 6.5% during the
month for its second straight monthly decline.
December gold futures moved higher on Wednesday as well,
climbing $7, or 0.4%, to $1,719.10. For the month of October,
however, the yellow metal dropped 3.1%, breaking its four-month
winning streak.
Levels to watch in trading...
-
Dow Jones Industrial Average (DJI - 13,096.46)
- support at 11,500; resistance at 14,000
-
S&P 500 Index (SPX - 1,412.16)
- support at 1,100; resistance at 1,500
-
Nasdaq Composite (COMP - 2,977.23)
- support at 2,400; resistance at 3,400
At the end of every market day, the staff at Schaeffer's
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