It was another restless session for the
Dow Jones Industrial Average (DJI)
, thanks to mixed messages from Capitol Hill. Just a day after
waxing optimistic on fiscal-cliff talks, House Speaker John Boehner
(R-Ohio) admitted to "no substantive progress" in Washington, D.C.,
sending stocks lower around midday. However, while Senate Majority
Leader Harry Reid (D-Nev.) pointed the finger at Republicans, he
vowed Congress will "finalize this this year." Against this
backdrop, and thanks to a round of encouraging economic data, Wall
Street maintained the glass-half-full approach, with stocks
finishing higher for a second straight day.
Continue reading for more on today's market events,
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Dow Jones Industrial Average (DJIA)
traded in a range of more than 100 points, but ultimately ended
36.7 points, or 0.3%, higher. As such, the blue-chip barometer
settled north of both the 13,000 level and its 200-day moving
average -- a feat accomplished just once since Nov. 6. Among the
index's 30 components, UnitedHealth Group (
) led the 21 advancers with a 3% gain, while
paced the eight decliners with a 2.8% loss. Alcoa (
), meanwhile, finished flat.
S&P 500 Index (SPX)
also dipped its toes in the red, but spent most of the session
comfortably higher. By the close, the broad-market barometer tacked
on 6 points, or 0.4%. Not to be outdone, the
Nasdaq Composite (COMP)
avoided negative territory altogether, soaring 20.2 points, or
0.7%, to end atop the 3,000 level for the first time since Nov.
On the other hand, the
CBOE Market Volatility Index (VIX)
gave up 2.9% on the day.
A Trader's Take
"There was once again a lot of rhetoric from Washington
regarding the fiscal cliff, but in the end the strong pending home
sales report and a great revision higher to third-quarter gross
domestic product (GDP) were big pluses for the bulls," said
Schaeffer's Senior Technical Strategist Ryan Detrick. "After
yesterday's strong price action we didn't give anything up -- in
fact, we gained some more. Under the surface we had some big-time
outperformance from small caps. They usually lead during healthy
times, and that is exactly what we've been seeing recently."
Broadening the scope a bit, Detrick noted, "The reality is the
economy isn't great and the fiscal cliff is scaring everyone;
still, the economy is on much better footing than most give it
credit. With the lowered overall expectations we've been talking
about, this could be a really nice sign for continued gains."
Economic and Earnings News
Initial jobless claims fell by 23,000 last week to a seasonally
adjusted 393,000, reported the Labor Department, as claims for the
previous week were upwardly revised to 416,000. The data was
stronger than anticipated, as economists were looking for 395,000
first-time claims for unemployment benefits. However, the four-week
moving average of initial claims rose by 7,500 to hit a new annual
high of 405,250.
The U.S. economy expanded at an annual rate of 2.7% during the
third quarter, according to the Commerce Department, up from the
advance estimate of 2.0%. The preliminary GDP reading fell just shy
of the consensus estimate for 2.8% growth, but marked the fastest
pace of expansion since the fourth quarter of 2009.
The National Association of Realtors (NAR) said its pending home
sales index improved 5.2% in October to 104.8, blowing past
economists' average estimate for a 1.0% rise. Additionally, the
September index was upwardly revised to 99.6. "We're seeing more
impact now from steady job creation and rising consumer confidence
about home buying," noted NAR Chief Economist Lawrence Yun.
Optimism rose during the week ended Nov. 28, according to the
latest survey by the American Association of Individual Investors
(AAII). The percentage of respondents with a bullish view on stocks
checked in at 40.9%, up from 35.8% in the previous week. The
percentage bearish dropped to 34.4% from 40.8%, while the
percentage neutral edged up to 24.7% from 23.4%.
More Stocks Making News
For today's activity in commodities, options, and more, head
to page 2.
In the Options Pits
Oil futures ticked higher for the first session in four, as an
upwardly revised GDP number and hopes for a fiscal-cliff resolution
bolstered expectations for demand. In addition,
stronger-than-expected housing and jobless data also lifted black
gold. By the close, January-dated crude added $1.58, or 1.8%, to
settle at $88.07 per barrel.
Gold futures also snapped a three-session losing streak, with an
ailing greenback luring foreign-currency holders to the
dollar-denominated commodity. Furthermore, hints of additional
stimulus measures on the horizon translated into a boon for gold,
after New York Fed President William Dudley said he'd "be assessing
the employment and inflation outlook in order to determine whether
we should continue Treasury purchases into 2013." By the time the
dust settled, December-dated gold gained $10.70, or 0.6%, to finish
at $1,727.20 an ounce.
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