It was another back-and-forth session for the
Dow Jones Industrial Average (DJI)
, though the bears eventually prevailed. Stocks erased early gains
on signs of contracting U.S. manufacturing activity, and House
Republicans' budget proposal failed to spark optimism about
bipartisan deal-making. With the clock ticking, the looming fiscal
cliff remained in focus, and the major indexes ended just off
Continue reading for more on today's market events,
Daily Game Plan
: Senior Trading Analyst Bryan Sapp explains why you should
play this zone in the short term
Chart of the Day
: Senior Options Strategist Tony Venosa, CMT, is watching
this banking bigwig
and its dance with a key trendline.
: With just a month left before we head over the fiscal cliff,
here's your contrarian guide to a
December to remember
Everything You Need to Know
: Your one-stop shop for levels to watch, economic data, earnings
reports, stocks on the move, and commodities action.
Dow Jones Industrial Average (DJIA)
started off strong, but blazed a path lower as the session
progressed. By the close, the blue-chip barometer shed nearly 60
points, or 0.5%, ending its two-day streak atop the 13,000 level.
Just eight of the Dow's 30 components avoided the red, with
Cisco Systems' (
0.6% gain leading the seven advancers, and Alcoa (
) finishing flat. Meanwhile, DuPont (
) paced the bearish majority with a 1.7% drop.
S&P 500 Index (SPX)
also turned tail in the first hour of trading, surrendering 6.7
points, or 0.5%, by the close. Likewise, the
Nasdaq Composite (COMP)
ended near a session low, giving up 8 points, or 0.3%, but
maintaining its perch atop the 3,000 level.
CBOE Market Volatility Index (VIX)
, on the other hand, added 4.8% to end north of 16 for the first
time since Nov. 16.
A Trader's Take
"The Institute for Supply Management's (ISM) sub-50
manufacturing number came out at 10:00 AM, and that sparked the
selling," said Sapp. "Before that the market was up about 0.4%, but
we eventually reversed course to finish 0.5% lower. However, even
though the market is weak, there are pockets of strength -- you can
still pick stocks. Technology was flat on the day, but a few names
were up pretty significantly."
Economic and Earnings News
The ISM manufacturing index dropped to 49.5 in November, down
from October's reading of 51.7. This move below 50 indicates a
shift from expansion to contraction in U.S. factory activity. The
magnitude of the decline caught economists off-guard, as the
consensus estimate called for a milder pullback to 51.0.
Construction spending rose 1.4% in October to a seasonally
adjusted annual pace of $872.14 billion, reported the Commerce
Department, besting the average Wall Street estimate for a gain of
0.5%. This marked the biggest monthly jump in construction spending
in just over three years.
More Stocks Making News
For today's activity in commodities, options, and more, head
to page 2.
In the Options Pits
Crude futures extended their winning streak to a third straight
session, as an ailing greenback translated into a boon for
dollar-denominated commodities. Furthermore,
solid manufacturing data out of China
helped to offset lackluster factory activity at home. By the close,
January-dated oil tacked on 18 cents, or 0.2%, to finish at $89.09
Dollar weakness also lifted gold futures, as did "safe haven"
demand amid fiscal-cliff uncertainty. By the time the dust settled,
gold for February delivery advanced $8.40, or 0.5%, to end at
$1,721.10 an ounce.
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