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
session lows.
Continue reading for more on today's market events,
including
:
-
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.
-
In Focus
: With just a month left before we head over the fiscal cliff,
here's your contrarian guide to a
December to remember
.
and...
-
Everything You Need to Know
: Your one-stop shop for levels to watch, economic data, earnings
reports, stocks on the move, and commodities action.
The
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' (
CSCO
)
0.6% gain leading the seven advancers, and Alcoa (
AA
) finishing flat. Meanwhile, DuPont (
DD
) paced the bearish majority with a 1.7% drop.
The
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.
The
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
:
Commodities
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
per barrel.
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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