"We saw strength across the board today," reported Schaeffer's
Senior Equity Analyst Joe Bell, CMT. "All of the major sectors
finished in the green, as health care and utility stocks led the
Dow Jones Industrial Average (DJI)
spent the entire day in the black once again, retaking control of
its 80-day moving average to close with a 150-point gain. "In the
current QE-driven environment we find ourselves in, sometimes worse
economic data is seen as further proof the Fed will keep their foot
on the gas pedal a little while longer."
Continue reading for more on today's market, including
The U.S. economy barely grows, mortgage rates keep rising, and
) bears expect a short-term drop.
Dow Jones Industrial Average (DJI - 14,910.14)
made additional headway today, adding 149.8 points, or 1%, to
retake control of its 80-day moving average. At its intraday high,
the blue-chip index touched 14,938.98. Meanwhile, 27 of the Dow's
30 names gained ground, with Boeing (
) and Home Depot (
) each rallying 2.1%. At the back of the pack was Alcoa (AA), which
suffered a 2.2% pullback.
S&P 500 Index (SPX - 1,603.26)
also moved back above its 80-day trendline, but it did one better;
it closed atop the 1,600 round-number mark, up 15.2 points, or
almost 1%. The
Nasdaq Composite (COMP - 3,376.22)
slightly lagged its index counterparts, with a gain of 0.9%, or
CBOE Market Volatility Index (VIX - 17.21)
continued to collapse, losing 1.3 points, or 6.8%. Since Monday's
intraday high at 21.91, the index has surrendered more than
A Trader's Take
"The big news on the economic front this morning was
first-quarter GDP growth, which was revised down to 1.8% when the
consensus expected it to remain at 2.4%," noted Bell. "In turn, the
markets saw a continuation of yesterday's rally, as we recover from
our recent sell-off."
3 Things to Know About Today's Market
- The final reading for the
first-quarter gross domestic product (GDP)
revealed a modest annualized growth rate of 1.8%, down from the
previous estimate of 2.4%. Economists had been expecting the
figure to be unrevised from last month's projection. Consumer
spending -- which came in weaker than expected -- played a large
role in this adjustment.
- The Mortgage Bankers Association reported that
mortgage applications dropped
3% during the past week, as mortgage rates continued to move
higher. The rate on fixed 30-year mortgages averaged 4.46% during
the week ended June 21, reaching its highest level since August
2011. On a week-over-week basis, this reading popped 29 basis
points, in the wake of last week's Fed remarks.
- Narayana Kocherlakota, president of the Minneapolis Federal
Reserve, appeared on CNBC to suggest the
central bank offer greater clarity
surrounding the federal funds rate. Kocherlakota opined that the
market volatility has as much to do with this rate -- "our main
policy instrument" -- as with any tapering of the Fed's
5 Stocks We Were Watching Today
- As the metals sector continued its retreat, long-term bears
Silver Wheaton (SLW)
- Covered-call traders were out in force on
Ford Motor (F)
, banking on a ceiling at the $16 level.
- Put buyers scooped up out-of-the-money LEAPS in order to bet
on a long-term pullback in
American International Group (AIG)
Nokia Corporation (
option bears believe downside is likely over the next few
Chipotle Mexican Grill (CMG)
was initiated with a "buy" rating in new coverage from Sterne
Agee this morning.
For a look at today's options movers and commodities
activity, head to page 2.
Crude oil rebounded from an early-session loss, as August
futures closed up 18 cents, or almost 0.2%, at $95.50 per barrel.
The weekly inventories report indicated that supplies held steady,
versus expectations for a decline.
Gold futures, however, weren't so lucky, as the precious metal
continued to spiral lower. The August-dated contract sank $45.30,
or 3.6%, to end the session at $1,229.80 per ounce. This was the
lowest closing price for a front-month contract since August 2010.
Heading into the end of the second quarter, gold is on track to
have given back 23% during the last three months.