Dow Retakes 15,000, Stocks End Near Highs, With No Budget Deal in Sight

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"Another day has passed and the government shutdown continues," sighed Schaeffer's Senior Equity Analyst Joe Bell, CMT. "We ended the week on a bit of a positive note, as most major sectors finished in the green after a few days of negative price action. Taking a step back, we still remain in a period of congestion with little net movement." For its part, the Dow Jones Industrial Average (DJI) rebounded back above the 15,000 millennium level and finished not far from its intraday high, while other major indexes followed suit. Weekly stats, however, reflect rising volatility and mixed returns for stocks.

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

plus...
    Political leaders grow increasingly frustrated, Twitter releases its game plan, and option bulls express short-term hopes for Advanced Micro Devices ( AMD ).

Aside from a brief trip below the breakeven line shortly after the open, the Dow Jones Industrial Average (DJI - 15,072.58) spent the day in the black, retaking control of the 15,000 mark and closing near its intraday high. By the bell, the blue-chip index had gained 76.1 points, or 0.5%. For the week, however, the Dow surrendered 1.2%. The index's 24 advancers were paced by Walt Disney ( DIS ), which added 2%. At the back of the pack was Wal-Mart Stores ( WMT ), which dropped 0.5%.

The S&P 500 Index (SPX - 1,690.50) also muscled higher on the day, settling with a gain of 11.8 points, or 0.7%, to pare its weekly loss to 0.1%. Also higher was the Nasdaq Composite (COMP - 3,807.75) , which gained 33.4 points, or 0.9%, and added 0.7% for the week.

The CBOE Market Volatility Index (VIX - 16.74) slipped back south of the 17 threshold, losing 0.9 point, or 5.3%, on the day. Week-over-week, however, the market's fear gauge managed to gain 8.3%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The Nasdaq has really outperformed this week and still trades near a 13-year high," noted Bell. "Small-cap stocks have also held up pretty well during the past week, which we view as a positive for the long-term health of the market."

3 Things to Know About Today's Market :

  • Verbal barbs continued to fly across party lines as the government shutdown extended to a fourth day . President Barack Obama canceled his trip overseas to the Asia-Pacific Economic Corporation summit, and leaders from both parties reiterated their desire for an end to the gridlock. House Speaker John Boehner (R-Ohio) implored Democrats to reconsider modifying Obamacare as part of any budget deal, and exclaimed, "The American people don't want their government shut down and neither do I." The president held his ground, noting, "I'm happy to have negotiations. We can't do it with a gun held to the head of the American people." (CNN)
  • Following similar words of caution from the U.S. Treasury Department, International Monetary Fund Managing Director Christine Lagarde said it is "mission critical" that the U.S. lift its debt ceiling before the Oct. 17 deadline. In a speech to students in Washington, D.C., on Thursday, Ms. Lagarde noted that a delay in doing so could "very seriously damage not only the U.S. economy, but the entire global economy." (Bloomberg Businessweek)
  • Investors now have more details about the most anticipated initial public offering (IPO) since Facebook (FB) debuted last May. Twitter disclosed its S-1 filing , which revealed information such as its future ticker symbol ( TWTR ) and the amount the micro-blogging site hopes to raise via its IPO ($1 billion). (ABC News)

5 Stocks We Were Watching Today :

  1. Wall Street's resolute support for Apple (AAPL) continued, as BMO hiked its price target on the iPhone parent by $28.
  2. Our Option Idea of the Week outlines why American International Group (AIG) could be a good target for intermediate-term bulls.
  3. Weekly options were popular in Advanced Micro Devices ( AMD ) pits, as bullish traders targeted short-term gains around the semiconductor's earnings release.
  4. Call buyers were willing to pay a small premium to place back-month bets on Juniper Networks (JNPR) .
  5. Put buyers descended upon TiVo (TIVO) , betting on the stock to reverse lower in the coming weeks.

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

As Tropical Storm Karen brewed in the Gulf of Mexico, crude oil futures closed higher for only the second time in six sessions. At the closing bell, November-dated crude was up 53 cents, or 0.5%, at $103.84 per barrel. Week-over-week, black gold managed to add 0.9%.

Elsewhere, a rising dollar and continued debt-ceiling concerns sent gold futures lower on the day. December-dated gold logged a drop of $7.70, or 0.6%, to settle at $1,309.90 per ounce. Over the past week, gold retreated 2.2%.

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.

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This article appears in: Investing , Options

Referenced Stocks: AMD , C , DIS , JCP , WMT

Schaeffer's Investment Research

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