Markets Edge Higher Amid Continued Tapering Buzz

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"After Friday's surprising reaction to the stronger-than-expected jobs data, the market seemed to need a day to catch its breath," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "There wasn't a lot of news, but we did see some merger and acquisition activity, which is always a nice boost to overall confidence." Meanwhile, as investors digested the latest round of comments from Federal Reserve officials, the Dow Jones Industrial Average (DJI) pared some of its gains during the afternoon to end modestly higher.

Continue reading for more on today's market, including :

plus...
    Federal Reserve officials offer some insight, McDonald's Corporation ( MCD ) sales disappoint the Street, and Priceline.com Inc ( PCLN ) defies the skeptics.

The Dow Jones Industrial Average (DJI - 16,025.53) spent nearly all of today's session trading above breakeven, but pared the bulk of its gains by the end to settle with a gain of 5.3 points, or less than 0.05%. General Electric Company ( GE ), Microsoft Corporation ( MSFT ), and Chevron Corporation (CVX) led the Dow's 17 winners, each posting a gain of 0.9%. McDonald's Corporation ( MCD ) paced the 12 laggards, dropping 1.1%, while Johnson & Johnson (JNJ) was unchanged.

The S&P 500 Index (SPX - 1,808.37) also closed near its lows of the day after spending the lion's share of the session in the green. By the closing bell, the index had managed an increase of 3.3 points, or 0.2%. The Nasdaq Composite (COMP - 4,068.75) followed a similar path -- edging up 0.2%, or 6.2 points, but not before notching a fresh 13-year intraday peak of 4,081.78.

The CBOE Volatility Index (VIX - 13.49) took a modest tumble, losing 0.3 point, or 2.2%. The market's fear gauge closed a hair below its 40-day moving average.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Historically, December is flat until about the 15th of the month, then it goes straight up for the next two weeks," Detrick noted. "So far, 2013 seems to be playing that potential template perfectly."

3 Things to Know About Today's Market :

  • Federal Reserve officials provided some insight into when a reduction to the central bank's asset-buying efforts might begin. Federal Reserve Bank of Richmond President Jeffrey Lacker believes tapering will be up for discussion at next week's gathering of the Federal Open Market Committee. Also, James Bullard -- head of the St. Louis Fed -- said modest cuts to the $85 billion in monthly purchases could begin this month, given the recent round of positive economic data. (MarketWatch)
  • With the merger between American Airlines and US Airways now complete, the new combined company opened for trading on the Nasdaq today under the symbol AAL and the company name American Airlines Group Inc. AAL shares closed almost 3% higher in today's session. (CNNMoney)
  • Global sales edged higher at McDonald's Corporation ( MCD ) in November, but failed to meet analysts' expectations . The chain was negatively impacted by a slowdown in U.S. same-store sales, which some are attributing to slower service following the addition of new menu items such as smoothies and lattes. (CNBC)

5 Stocks We Were Watching Today :

  1. Zynga Inc (ZNGA) option bulls set their sights on the $5 level.
  2. Despite impressive action on the charts, Priceline.com Inc ( PCLN ) continues to be targeted by put traders.
  3. Short-term speculators wagered on a breakout in Cisco Systems (CSCO) shares.
  4. Will the diminishing popularity of Budweiser and other brands take its toll on Anheuser-Busch InBev SA (ADR) (BUD) ?
  5. Bank of America Corp (BAC) earned a modest price-target hike ahead of the opening bell.

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Oil futures succumbed to selling pressure today on fears of impending tapering plans from the central bank. The January contract logged a modest drop of 31 cents, or 0.3%, to end at $97.34 per barrel, black gold's first negative finish in seven sessions.

Gold futures, on the other hand, reacted positively to hints that the Federal Reserve may soon slow its stimulus efforts. By the close, February futures had gained $5.20, or 0.4%, to settle at $1,234.20 an ounce.

SCHAEFFER'S MARKET POSTURE



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options

Referenced Stocks: GE , INTC , MCD , MSFT , PCLN

Schaeffer's Investment Research

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