Dow Jones Industrial Average (DJI)
got off to a rough start, but stair-stepped its way modestly higher
by the close. "It was a very light news day, and volume was also
light," said Schaeffer's Senior Technical Strategist Ryan Detrick,
CMT. Apple Inc. (
) and Dell Inc. (
) battled for headline supremacy, resulting in a roller-coaster
session for the tech-rich Nasdaq Composite (COMP). However, "With
the S&P 500 Index (SPX) up near its 2012 peak at 1,475, and
earnings season just about to heat up, most participants are taking
a breather here."
Continue reading for more on today's market, including
- More bickering on Capitol Hill, analyst action ahead of
) mystery event, and today's Tweet of the day, which features an
interesting stat on AAPL.
Dow Jones Industrial Average (DJI)
didn't stray too far from breakeven, exploring a range of just 61
points. By the close, the blue-chip barometer added 18.9 points, or
0.1%, to reclaim a perch atop the 13,500 level. Sixteen of the
Dow's 30 components ended higher, led by
4.9% ascent. Meanwhile,
Verizon Communications (
paced the 13 declining equities, shedding 1.6%, while Intel (INTC)
S&P 500 Index (SPX)
also traded in a tight range, giving up 1.4 points, or 0.1%, by the
Nasdaq Composite (COMP)
took a roller-coaster ride in the red, settling on a loss of 8.1
points, or 0.3%. Earlier in the session, the tech-rich COMP touched
an intraday nadir of 3,104.08.
CBOE Market Volatility Index (VIX)
bounced back from multi-year lows, edging 0.2 point, or 1.2%,
A Trader's Take
"There were two highlights on a rather slow day," said Detrick.
"First off, AAPL sank more than 3% on reports of
poor iPhone 5 demand
. Nonetheless, the market took this in stride, as there was a time
last year when a big down day for AAPL meant a bloodbath across the
board. This is changing, and I find it to be a very nice sign." On
the other hand, DELL surged on reports of a potential buyout. "Yes,
DELL has been a long-time laggard," admits Detrick. "Still, I'm
always encouraged by deals, as it shows there are still solid
values out there and companies have the confidence and financing to
make things happen."
3 Things to Know About Today's Market
- As alluded to earlier, Dell Inc. (
) is in preliminary buyout talks with at least two private-equity
, citing sources familiar with the matter. The shares of DELL
jumped nearly 18% at their session peak, topping out at $12.83,
and were temporarily halted in afternoon action. DELL executives
have remained mum so far.
- Home prices could rise 6% in 2013, according to estimates
from CoreLogic. The market research firm said the same catalysts
that pushed home prices 7.5% higher last year -- including
affordable prices, fewer foreclosures, and a shrinking inventory
of homes -- are still in play.
- Congress is back at it. President Barack Obama warned that a
failure to increase the $16.4 trillion debt ceiling could "tip us
into recession," and said the "markets could go haywire," should
"Congressional Republicans refuse to pay America's bills on
time." In response, House Speaker John Boehner, R-Ohio, said
Americans are against "raising the debt ceiling without reducing
government spending at the same time," and called for a dollar in
spending cuts for every dollar the debt ceiling is raised.
However, Obama said such a ratio is off the table. The U.S.
Treasury will lack the funds to pay debtors as early as Friday,
Feb. 15, the Bipartisan Policy Center reports.
... The White House this weekend rejected the idea of building a
"Death Star" for national defense
, denying a petition signed by more than 34,000 apparent
fans. In a detailed response, Paul Shawcross, chief of the Science
and Space Branch with the White House Office of Management and
Budget, said, "The administration does not support blowing up
planets." Furthermore, he asks, "Why would we spend countless
taxpayer dollars on a Death Star with a fundamental flaw that can
be exploited by a one-man starship?"
Today's Top Tweet
"Since mid-September, Apple has lost $196 billion in market
value which works out to $620 per every American."
(Eddy Elfenbein), 9:21 a.m.
5 Stocks We Were Watching Today
- Facebook Inc (
) earned yet another
ahead of tomorrow's mysterious analyst event.
- Option traders
scooped up puts
on Sirius XM Radio Inc (SIRI).
lifted its price target
on Ford Motor Company (F).
- Cirrus Logic's (CRUS)
attracted short-term option bears.
- Amazon.com (AMZN) jumped to an
Question of the Day
: Why do some stocks issue options that trade in one-point
increments, while others have options in five-point
: The strike prices available on a particular stock are typically
related to the underlying security's share price. The higher the
stock price, the wider the spreads will usually be between strike
prices. There are four commonly used intervals: $1, $2.50, $5, and
(much more infrequently) $10. While there are some exceptions, the
general rule is that the $1 interval is used for highly liquid
stocks trading under $50, while the $2.50 or $5 intervals are
employed on stocks trading between $50 and $150. Finally, the $10
interval is used for the priciest stocks, or those trading north of
$200. Many highly liquid, high-priced stocks, however -- such as
) -- will have their options listed in $5 increments.
For a look at today's options movers and commodities
activity, head to page 2.
A weaker U.S. dollar translated into a boon for commodities
today. February-dated crude added 58 cents, or 0.6%, to end at
$94.14 per barrel. Meanwhile, the front-month gold contract tacked
on $8.80, or 0.5%, to close at $1,669.40 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
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.
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.