U.S. lawmakers kept things exciting right up until the closing
bell, as rumors of an eleventh-hour bipartisan alternative to a
fiscal-cliff swan dive buoyed stocks in afternoon trading and sent
Dow Jones Industrial Average (DJI)
back on the north side of 13,000. "After a bleak start, the day saw
a grind higher as hopes continued to mount that the fiscal cliff
would be averted by a last-minute deal," noted Schaeffer's Senior
Options Strategist Tony Venosa. "It was great to see a broad-based
rally, with all major sectors and industries closing in the black."
Continue reading for more on today's market, including
- A fiscal-cliff compromise (?), a long-term play on Zynga (
), and our Tweet of the day, which offers a bit of optimism as we
approach the end of 2012.
Dow Jones Industrial Average (DJI)
traded in a 225-point range on the final day of the year, as
fiscal-cliff gloom turned to hope in the early afternoon, allowing
the blue-chip average to emerge from below the 13,000 level and
close just shy of its intraday peak. By the end of the session, the
Dow was up 166 points, or 1.3%. The Dow ended December with a gain
of 0.6% but surrendered 2.5% for the quarter. In 2012, the average
was up 7.3%.
Seeing similar intraday reversals, the
S&P 500 Index (SPX)
jumped 24 points, or 1.7%, while the
Nasdaq Composite (COMP)
added 59 points, or 2%. The SPX gained 0.7% for the month, lost 1%
in the fourth quarter, and ended 2012 up 13.4%. The COMP's
corresponding moves were 0.3%, negative 3.1%, and 15.9%,
CBOE Market Volatility Index (VIX)
took it on the chin as the fiscal-cliff situation neared resolution
-- one way or another. By the close, the VIX had dropped 20.7%, or
4.7 points, to breach its 10-day moving average. Although the VIX
added 13.5% in December and 14.6% in the quarter, it lost 23% in
3 Things to Know About Today's Market
- With the nation teetering on the edge of the fiscal cliff,
party leaders continued to debate potential solutions through the
final day of the year. Speaking at 1:30 p.m. Eastern, President
Barack Obama was optimistic, saying a deal was "within sight,"
while acknowledging there were issues left to be resolved. The
rumored budget deal being forged between Senate Republicans and
the White House (represented by Senate Minority Leader Mitch
McConnell, R. Ky., and Vice President Joe Biden, respectively)
would lift taxes for households making more than $450,000
annually. Taxes on inheritance income and capital gains would
also be increased. While any deal hinges on approval from the
House, the chamber has until noon on Thursday (when the new class
is sworn in) to vote on the measure.
- Retail Metrics again pared estimates for same-store sales in
December to show an increase of 1.9%. Since the start of the
month, the average analyst estimate has dropped 0.6 percentage
point from the initial growth estimate of 2.5%. An increase of
1.9% would be the worst retail-sector performance in December
since 2008. This adjustment does not bode terribly well for
December same-store sales, which some retailers will be reporting
- Most broader European measures closed in positive territory
for the year, led by the Athens Composite Index, which settled
the year 33% higher. In second place was the German DAX, up 28%
over the past 12 months. The French CAC 40 index gained 15% for
the year, while the London FTSE 100 index advanced by 5.8%.
Bringing up the rear in the region was Spain's IBEX 35, which
declined roughly 6% in 2012.
... the parent of the
Los Angeles Times
emerged from Chapter 11 bankruptcy, following four years of
reorganization efforts. Tribune Company now owns 23 television
stations and eight daily newspapers, but plans on selling most or
all of the latter in order to focus on broadcast operations such as
WGN America. Peter Liguori, who formerly served as chief operating
officer for Discovery Communications (
), is expected to be named the firm's new CEO.
Today's Top Tweet
"If 2013 is a book yet to be written then tomorrow is the first
blank page. Let's get to work."
(David Blair), 12:01 p.m.
5 Stocks We Were Watching Today
- Long-term Zynga (
) speculators are hoping for
- Facebook Inc (
two brokerage upgrades
- Large-scale call buyers in Ford Motor (
hit the exits
- General Motors (GM) zoomed to a
new annual high
- McDonald's Corporation (MCD) captured the attention of
short-term call buyers
, who expect modest upside through week's end.
Question of the Day
: What were the best-performing stocks in 2012?
: In this week's edition of
Monday Morning Outlook
, our Senior Quantitative Analyst Rocky White
surveyed all stocks
for notable action (to qualify, stocks had to be trading north of
$5 at the beginning of the year and relatively active, with average
daily volume of at least 1 million shares). Topping the charts as
of Friday afternoon was 3D Systems (DDD), up 251%. Next were
Affymax (AFFY) and homebuilder PulteGroup (PHM), which each gained
roughly 180% over the course of the calendar year.
For a look at today's options movers and commodities
activity, head to page 2.
Oil futures finished 2012 with a loss of 7.1% but the February
contract managed to tick higher in today's trading, closing up
$1.02, or 1.1%, to end at $91.82 per barrel. Gold futures for
February delivery jumped $19.90, or $1.2%, to end at a two-week
high of $1,675.80 an ounce. For the year, the yellow metal tacked
on 7%, its smallest annual gain since 2008.
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
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