"The market struggled below breakeven for most of the day and
ended the session slightly in the red," summarized Schaeffer's
Senior Equity Analyst Joe Bell. Despite a few fleeting trips into
positive territory, the
Dow Jones Industrial Average (DJI)
closed with a modest loss and the
S&P 500 Index (SPX)
breached short-term trendline support.
Continue reading for more on today's market, including
- How China helped commodities today, a brief look at five
notable stocks, and our Tweet of the day -- a good peek into the
mindset of a trader.
The bulls put up a worthy fight, actually pushing the
Dow Jones Industrial Average (DJIA)
into positive territory for a few short-lived excursions.
Ultimately, however, the index settled with a loss of 35 points, or
0.3%. Of the 30 Dow stocks, 19 were in the red, with American
) faring the worst with a 1.9% drop. Alcoa (
), meanwhile, led the advancers with a gain of 1.8%, while General
) was unchanged. For the week, the Dow slumped 0.2%.
S&P 500 Index (SPX)
lost ground as well, giving back six points, or 0.4%, on the day to
fall south of its 10-day moving average. The
Nasdaq Composite (COMP)
brought up the rear once again, shedding 21 points, or 0.7%. The
SPX lost 0.3% for the week, while the COMP surrendered 0.2%.
CBOE Market Volatility Index (VIX)
sprinted right up to the 17 mark today, gaining 0.4 point, or 2.7%.
On a weekly basis, the index surged 7%.
A Trader's Take
"This morning, there was better-than-expected economic data out
of China, but this news from overseas failed to bolster most U.S.
equities," Bell observed. "Elsewhere, Apple (
) was dragging down the technology sector, as the stock's bounce
off the $520 level was certainly short-lived." Bell also noted,
"The [SPX] remained above 1,410, which has been previous support
(and resistance) in the past. But overall, there really wasn't a
whole lot to celebrate today, and the market was quite bland. As we
near the holiday season," he continued, "the pending fiscal cliff
remains on most investors' minds and will certainly grab more and
more headlines with each passing day."
3 Things to Know About Today's Market
- The consumer price index (CPI) fell 0.3% last month, reported
the Labor Department, as gasoline prices absorbed a rare plunge
of 7.4%. The core CPI -- which excludes volatile food and energy
costs -- edged up 0.1%, slightly below the expected rise of 0.2%.
Elsewhere, industrial production accelerated 1.1% in November,
according to the Federal Reserve, in part due to a Superstorm
Sandy-related skew. Economists were looking for production to
rise just 0.2%.
- Commodities benefited from positive news out of China, as the
nation's purchasing managers' index (PMI) edged up to 50.9 in
December, hitting a 14-month high. Readings above 50 are
indicative of expansion in the manufacturing sector. Earlier this
week, Chinese officials reported a 14.9% increase in retail sales
for November, which also hinted at improving conditions for the
world's second-largest economy.
- General Electric (
) is boosting its quarterly dividend by 12% beginning in January,
to 19 cents per share. The company is continuing to slowly
rebuild from the dark days of early 2009, when GE's dividend was
cut to 10 cents from 31 cents. The venerable conglomerate also
said it will buy back another $10 billion in shares.
... Southwest Airlines (
) could be on the hook for $29 million in free drink credits.
Plaintiffs filed a class-action lawsuit against the airline more
than two years ago, arguing the carrier owed recompense for drink
vouchers that expired on Aug. 1, 2010, following a shift in policy
for Business Select fliers. The newly settled lawsuit estimates 5.8
million eligible vouchers (worth $5 each, hence $29 million) were
not redeemed. In order to collect replacement vouchers (which will
expire after one year), class members need only complete a form
indicating the estimated number of unused vouchers they had.
Today's Top Tweet
"Often my best trades are the ones I don't want to make
5 Stocks We Were Watching Today
- Spurred by concerns over iPhone production rates, UBS
cut its price target
on Apple Inc. (
) by more than 10%.
- Call buyers
bet on short-term upside
in Facebook (FB) shares.
- Starbucks (SBUX) options bears think the stock has
ample downside ahead
over the next few months.
- Bullish speculation
continued in Zynga (ZNGA)
, as the stock presses above previous resistance.
- First Solar (FSLR) could be a
winning trade idea
for bullish contrarians.
Question of the Day
: Where can I find out if weekly or quarterly options are offered
on a particular security?
: The list of available weekly and quarterly options is constantly
changing, and is updated by the Chicago Board Options Exchange
(CBOE). The list of available weeklies (for indexes,
, and stocks) is
; the list of available quarterlies is
For a look at today's options movers and commodities
activity, head to page 2.
Oil futures ended the week up 0.9% after gaining 84 cents, or
1%, to settle at $86.73 per barrel in today's session. Gold futures
also advanced, edging up 20 cents to $1,697 an ounce, but closed
off 0.5% for the week.
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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