"Stocks dove deep into the red this morning, after two economic
reports were below expectations," noted Senior Equities Analyst Joe
Bell. "But bulls have to be encouraged, as most major sectors
bounced and ended in positive territory. There doesn't seem to be
one big cause for the turnaround, though some are pointing toward
speculation that the European Central Bank (ECB) will introduce
more stimulus to the euro zone this week." Despite a finish in the
red for the
Dow Jones Industrial Average (DJI)
, the blue-chip barometer repaired much of its 114-point intraday
deficit and closed safely above the psychologically important
13,000 level.
Click through to see what else was on our radar today:
And now, a look at the numbers...
The
Dow Jones Industrial Average (DJI - 13,035.94)
endured a 115-point swing today -- climbing as high as 13,092.39
and falling as low as 12,977.09 -- before all was said and done.
But, by the time the closing bell rang, the Dow turned in a loss of
54.9 points, or 0.4%. Nineteen of the 30 blue chips headed south in
today's session, as Caterpillar Inc. (
CAT
) paced the laggards with a 3.1% decline. Meanwhile, Verizon
Communications Inc. (
VZ
) led the 11 outperformers with a 1.8% jump.
The
S&P 500 Index (SPX - 1,404.94)
couldn't maintain its late-day rally and drifted lower by 1.6
points, or 0.1%, though the index held onto its perch atop 1,400.
On the other hand, the
Nasdaq Composite (COMP - 3,075.06)
advanced 8.1 points, or 0.3%, in the last two hours of trading,
turning in the best performance of its fellow benchmarks.
The
CBOE Market Volatility Index (VIX - 17.98)
climbed higher today, closing at its loftiest price since Aug. 1.
For the session, the VIX gained 0.5 point, or 2.9%.
Today's highlight
: "The small caps took the lead in today's bounce, which could bode
well for the overall market," said Bell. "The
iShares Russell 2000 Index (ETF) (NYSEARCA:IWM)
began leading in early August, after a few months of
underperformance."
Turning to today's major market stories...
- Hovnanian Enterprises, Inc. (
HOV
), Standard Pacific Corp. (
SPF
), and CNO Financial Group Inc (
CNO
) could benefit from
a "short covering" rally
.
- Front-month put players bet on a retreat for
Discover Financial Services (DFS)
.
- Tech issues
International Business Machines Corp. (IBM)
and
NVIDIA Corporation (NVDA)
were tapped with analyst adjustments today.
- A bearish option trader rolled down his contracts on
beleaguered
First Solar, Inc. (FSLR)
.
- American International Group, Inc. (AIG) and Valeant
Pharmaceuticals International, Inc. (VRX) soared to
new all-time highs
.
-
Option Trends
: eBay Inc. (EBAY), Kraft Foods Inc (KFT), and Nike, Inc.
(NKE).
- "Worry numbers," low-volatility, and how the
past earnings season fared for Wall Street
.
- The
September commentary of the
Option Advisor
is available online.
For today's activity in commodities, options, and more, head
to page 2.
Crude futures took a tumble today after a disappointing
Institute for Supply Management's (ISM) factory gauge ignited
concerns about demand for the commodity. To boot, some speculators
took profits following last week's gains. By the close, oil for
October delivery lopped off $1.17, or 1.2%, to settle at $95.30 a
barrel.
Conversely, gold futures jumped to their highest price since
March 12, in the wake of a weak manufacturing report, which only
stimulated hopes that the Federal Reserve would implement economic
stimulus. As the dollar dipped in today's trading, December-dated
gold added $8.40, or 0.5%, to close at $1,696 an ounce.
Levels to watch in trading...
-
Dow Jones Industrial Average (DJI - 13,035.94)
- support at 11,500; resistance at 14,000
-
S&P 500 Index (SPX - 1,404.94)
- support at 1,100; resistance at 1,500
-
Nasdaq Composite (COMP - 3,075.06)
- support at 2,400; resistance at 3,400
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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