Dow Rallies 194 Points as Investor Sentiment Pulls a 180

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Stocks exploded higher today, as the Dow Jones Industrial Average (DJI) surged nearly 200 points. "Sentiment seemingly pulled a full 180 from yesterday, and it appears that many were caught off-guard by today's rally," explained Equities Analyst Bryan Sapp. "While we've been stuck in a trading range for weeks, everything now appears ready to right itself. Hopefully, there will be some resolution, so that premium buyers don't continue to get chopped up in the market."

Keep reading to see what else was on our radar today:

  • See what's got Sapp exclaiming: "Oh, what a difference a day can make!"
  • Reading between the lines of the housing starts report .
  • Columnist Adam Warner wants you to know how to gauge the recent spike in market volatility .
  • Plus, Senior Technical Strategist Ryan Detrick believes there is reason to be optimistic about the current market.
And now, a look at the numbers...

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

The Dow Jones Industrial Average (DJI - 13,115.54) leapt markedly higher today, securing its first settlement atop 13,000 in over a week. In the last hour of trading, the Dow was up roughly 210 points at its session peak of 13,131.36, but pared some of its gains to close with a 194.1-point, or 1.5%, upswing. All 30 of the blue chips finished in the black, as Walt Disney ( DIS ) and Kraft Foods ( KFT ) paced the outperformers with wins of 2.5% and 2.4%, respectively.

The S&P 500 Index (SPX - 1,390.78) surged 21.2 points, or 1.6%, to finish well above the 1,375 level. Meanwhile, the Nasdaq Composite (COMP - 3,042.82) turned in the best performance of its fellow benchmarks, and soared 54.4 points, or 1.8%.

The CBOE Market Volatility Index (VIX - 18.46) dropped 5.6% to close down for a second straight session. The market's fear gauge ended just below its session high of 18.66.

Newsmakers...

Housing starts unexpectedly fell 5.8% in March to a seasonally adjusted annual rate of 654,000, reported the Commerce Department. This decline came as a surprise, as economists were looking for a 0.7% increase. Conversely, building permits rose 4.5% in March to an annualized 747,000 -- marking their highest level since September 2008 , and defying expectations for a drop of 0.3%.

The International Monetary Fund ( IMF ) upped its 2012 global growth forecast to 3.5%. During this timeframe, the IMF expects the U.S. economy to expand by 2.1%, and Europe to contract by 0.3%.

Today's highlight : "After a rough day on Monday, European indexes had a huge day today: London's FTSE 100 added 1.8%, while both the French CAC 40 and the German DAX were up 2.7%. A major reason for these big moves is a Spanish bond auction that went much better than expected," stated Sapp. "Additionally, after pulling the market down with it yesterday -- and after a scary open this morning -- Apple ( AAPL ) settled up nearly 5%."

Ryan Detrick visited The Traders Network on Monday to discuss what the recent rise in bearish sentiment on the Street could mean for contrarian investors. Click here to listen to the interview.

Turning to equities in focus...

And, in case you missed it , Adam Warner answered his own questionnaire for traders interested in volatility-based ETFs. Click here to read his responses.

For today's activity in commodities, options, and more, head to page 2.

Oil futures rallied today as stocks surged. The commodity also continued to receive support from Monday's news that the Seaway crude pipeline will be reversed earlier than initially planned, helping to ease an overabundance of supply. Crude for May delivery added $1.27, or 1.2%, to land at $104.20 a barrel.

Gold futures reversed their two-day trek lower, catching a lift from the positive momentum in the broader equities market. June-dated gold ticked up $1.40, or 0.1%, to close at $1,651.10 an ounce.

Levels to Watch in Trading :

  • Dow Jones Industrial Average (DJI - 13,115.54) - support at 11,500; resistance at 14,000
  • S&P 500 Index (SPX - 1,390.78) - support at 1,100; resistance at 1,500
  • Nasdaq Composite (COMP - 3,042.82) - support at 2,400; resistance at 3,400

OUTPERFORMING AND UNDERPERFORMING SECTORS

STOCKS - MOVERS

STOCKS - EARNINGS

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

For today's notable annual highs and lows, click here .

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: AAPL , DIS , IMF , KFT , LEN

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