Dow Falters, S&P 500 Hits Record Intraday High

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"After an incredibly strong week, today's attention was back on individual company earnings reports, and overall, the price action was mixed," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "A bit of consolidation here makes sense, as many market participants may wait for better entry opportunities." Against this backdrop, the Dow Jones Industrial Average (DJI) closed south of breakeven, while the S&P 500 Index (SPX) reached a new technical milestone.

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

  • Schaeffer's Senior Trading Analyst Bryan Sapp points out an area that could cause a "speed bump or two" for the S&P 500 Index (SPX).
  • Check out this week's Brand Face-Off to see which designer -- Michael Kors ( KORS ) or Coach ( COH ) -- comes out on top.
  • Aggressive option bulls rolled the dice on a significant move higher for this well-known Internet stock over the next four weeks.
plus...
    Existing home sales declined, McDonald's ( MCD ) hinted at a weak fourth quarter, and Google's ( GOOG ) new high beckoned call buyers.

Aside from a few brief blips higher, the Dow Jones Industrial Average (DJI - 15,392.20) spent most of the day in the red, and touched a session low of 15,362.66 around 11:00 a.m. ET. By the closing bell, the index was off 7.5 points, or 0.1%. General Electric ( GE ) led the Dow's 13 advancers, extending its post-earnings gains with a 2.3% rise, while Boeing (BA) paced the 17 decliners with a loss of 0.9%.

The S&P 500 Index (SPX - 1,744.66) was also parked in negative territory for much of the session, but still managed to tag a record intraday peak of 1,747.79. By day's end, the index was up 0.2 point, or 0.01% -- enough to reach another all-time closing high. Meanwhile, the Nasdaq Composite (COMP - 3,920.05) touched a 13-year intraday high of 3,931.45, and added 5.8 points, or 0.2%, by the close.


Elsewhere, the CBOE Volatility Index (VIX - 13.16) spiked higher right out of the gate, but pared its gains throughout the afternoon. Still, the "fear barometer" added 0.1 point, or 0.9%, for the session.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Technology stocks once again took a leadership role, something investors are getting used to," Bell went on. "Shares of Apple (AAPL) helped boost the sector today, as the equity continues its strong momentum that began in mid-September."

3 Things to Know About Today's Market :

  • The National Association of Realtors said existing home sales fell by a seasonally adjusted 1.9% in September to a yearly rate of 5.29 million, reflecting a steeper drop than what was projected by economists. Meanwhile, August's figure was downwardly revised to 5.39 million from an initial estimate of 5.48 million, which had marked a six-year peak. (MarketWatch)
  • McDonald's ( MCD ) reported a 4.6% increase in third-quarter profits to $1.52 billion, or $1.52 per share -- besting the consensus view by a penny -- while revenue rose 2.4% to $7.32 billion. However, MCD shares trended lower today after the burger chain forecast a drop in fourth-quarter margins. (Reuters)
  • JPMorgan Chase (JPM) reached a tentative agreement with the U.S. Justice Department today, under which it will pay $13 billion -- the highest settlement on record -- to terminate civil claims regarding the sale of faulty mortgage bonds to companies including Fannie Mae and Freddie Mac. However, the deal will not protect JPM from possible criminal liabilities. (Bloomberg)

5 Stocks We Were Watching Today :

  1. As Apple (AAPL) prepares to report quarterly earnings next week, the stock scored some bullish analyst attention this morning.
  2. Traders bet on a move higher for General Motors (GM) over the next few months by picking up December- and January-dated calls.
  3. With earnings looming on the horizon, call volume ramped up on Sprint (S) -- particularly in the front-months series of options.
  4. TiVo's (TIVO) positive price action triggered a flurry of call activity from option bulls -- or, potentially, hedging short sellers.
  5. A new record high for Google ( GOOG ) prompted speculators to scoop up the search-engine giant's weekly calls in hopes of further gains.

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 futures finished at their lowest price since July 1, after the U.S. Energy Information Administration (EIA) revealed a larger-than-expected increase in oil supplies for the week ended Oct. 11. By the close, the November contract shed $1.59, or 1.6%, to end at $99.22 per barrel.

Conversely, gold futures climbed higher today, as traders nervously anticipated the release of September's nonfarm payrolls data. December-dated gold tacked on $1.20, or 0.1%, to finish at $1,315.80 an ounce.

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: COH , GE , GOOG , KORS , MCD

Schaeffer's Investment Research

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