"Small caps and financials ripped higher today," exclaimed
Schaeffer's Senior Technical Strategist Ryan Detrick after the
closing bell. "When you see those two groups leading, it is a very
nice sign." Meanwhile, the
Dow Jones Industrial Average (DJI)
managed a triple-digit gain, and the Nasdaq Composite (COMP) retook
its perch above 3,000.
Continue reading for more on today's market, including
- Updates on the fiscal cliff and Apple's viability, a quick
look at five stocks we were watching, and our Tweet and Question
of the Day, which may help you face the end of the world.
Dow Jones Industrial Average (DJIA)
started the week on a positive note and pared some of last week's
losses, rising 100.4 points, or 0.8%, and closing just shy of its
intraday peak. Just three of the 30 Dow names were in the red for
the day, with Hewlett-Packard (
) bringing up the rear with a 3.7% loss. Taking the top slot,
meanwhile, was Bank of America (
), up 4% on the day.
S&P 500 Index (SPX)
retook control of its 10-day moving average as it gained 17 points,
or 1.2%. The
Nasdaq Composite (COMP)
overtook the round 3,000 level, meanwhile, with its gain of 39
points, or 1.3%.
CBOE Market Volatility Index (VIX)
stepped back for the day, shedding 0.7 point, or 3.9%, to close
near its intraday nadir.
A Trader's Take
"The headlines will tell you optimism over a coming fiscal cliff
deal drove today's gains," observed Detrick. "I'm not 100% sure if
that was the case. Everyone is still trying to figure out how this
will impact the market, but if you look at the action in some of
the higher-beta groups, it sure looks like they aren't worried.
Housing also did great today," he continued, "but I'm more
impressed with mid-caps. The S&P 400 MidCap Index (MID) found
support right at the nice round 1,000 area. We continue to think if
the MID can stay above this level, it's a major positive sign for
equities in general."
3 Things to Know About Today's Market
- President Obama and House Speaker John Boehner, R-Ohio, spent
what was likely a highly charged 45 minutes negotiating terms of
a fiscal cliff solution. While the meeting sparked hopes of an
agreement among attentive investors, a White House spokesman
implied that the Obama Administration continues to hold firm to
its version of the plan, while a GOP aide said Boehner will
reject any proposal that is unlikely to secure enough Republican
votes to pass.
- As per usual, Apple Inc. (
) was the talk of the town; the company suffered multiple
price-target cuts on
and briefly dipped to the $500 area before settling higher on the
day. In other news, more than 2 million iPhone 5 models were sold
in China over the three-day opening weekend, setting a company
record for weekend sales of a new device in the world's
- The New York Fed's Empire State manufacturing index pulled
back to negative 8.1 in December, down from last month's reading
of negative 5.2. This suggests an accelerated pace of contraction
in New York-area factory activity. The number surprised
economists, who were expecting an improvement up to negative
... in a story reminiscent of
, a Nebraska FedEx (
) driver opted to
dump close to 400 packages in the road
rather than deliver them. Said driver has since been dismissed from
the company, according to KETV in Omaha.
Today's Top Tweet
"Friday is both triple witching as well as the end of the world
according to the Mayans. Use a stop $$"
5 Stocks We Were Watching Today
- Netflix (NFLX) earned a
from Cantor Fitzgerald today, as the stock's outperformance
- Bullish speculators hope to
profit from a short-term pop higher
in Ford Motor (F).
- Bank of America (
bullish analyst attention
, pegged a new annual high, and lured
to its option pits.
- Short-term call buyers are
looking for a sharp surge
in Molycorp (MCP) this week.
- Zynga (ZNGA) call buyers headed
to the exits
Question of the Day
: What is a stop order?
: Also referred to simply as "stops," these are orders to buy or
sell a security when its price hits a certain point (on a move
higher or lower). Once this level is reached, the stop order
effectively becomes a market order. Although setting a stop order
does not necessarily guarantee the predetermined entry or exit
point -- due to market conditions -- these orders can help limit
negative exposure (or lock in profits) on a position as the
underlying moves higher or lower.
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures gained ground along with equities, adding 47
cents, or 0.5%, to $87.20 per barrel. Gold futures, meanwhile,
edged up 0.07%, or $1.20, to settle at $1,698.20 an ounce.
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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