It was another strong day on Wall Street, as the
Dow Jones Industrial Average (DJI)
posted its second consecutive triple-digit gain, and closed at its
highest point since Oct. 18. "Markets responded favorably to the
latest fiscal-cliff developments, and continued their technical
momentum," observed Schaeffer's Senior Equity Analyst Joe Bell, who
added that "financials and technology again led the way."
Continue reading for more on today's market, including
- Fiscal-cliff talks, an upgrade for Greece, five notable
stocks, and our Tweet of the day, which reminds us where we
should be focusing our attention.
Dow Jones Industrial Average (DJIA)
continued to forge a path higher, gaining 115 points, or 0.9%, to
notch its highest close since Oct. 18. Just four of the Dow's 30
members fell short of breakeven; General Electric (
) brought up the rear with a 1.1% decline. Duking it out for the
top slot were United Technologies (
) and Bank of America (
), the latter of which ended up the day's victor, with a gain of
Breaking through resistance at 1,440 was the
S&P 500 Index (SPX)
, which tacked on 16 points, or 1.2%. The
Nasdaq Composite (COMP)
, meanwhile, was the day's outperformer, rallying 1.5%, or 44
points. Both the SPX and COMP also finished near two-month
The CBOE Market Volatility Index (VIX) continued to founder,
losing 0.8 point, or 4.7%, to violate its 80-day moving
A Trader's Take
"It probably isn't a surprise," quipped Bell, "but the fiscal
cliff negotiations were again front and center this morning, and
signs are starting to point toward both sides budging a little.
Although both sides remain at odds, many participants feel
Washington officials will do something to halt anything drastic
that would create a disaster for the markets." Turning to specific
sectors, Bell added, "Housing stocks performed well again today, as
the latest NAHB Housing Market Index jumped up in December and
exceeded expectations. The homebuilding stocks are back near
12-month highs and the sector is one of the best performers of
3 Things to Know About Today's Market
- In Washington, Democrat and Republican leaders inched closer
to a budget deal that would circumvent the fiscal cliff. Both
sides have begun to show the potential for compromise -- most
recently, President Obama agreed to some wiggle room with regard
to taxes and certain spending cuts. Meanwhile, House Republicans
sketched out a "plan B," which would include tax hikes for those
earning $1 million or more.
- Standard & Poor's ratings service lifted its opinion on
Greece's sovereign credit rating by six slots (to B-) and granted
the country a "stable" outlook, thanks to expected peer support
from other European Union members. This is the good news. The bad
news, however, is that B- still constitutes "junk" status.
- Amid complaints from institutional investors including the
California teachers' pension fund, investment firm Cerberus
Capital Management is selling its stake in privately held gun
manufacturer Freedom Group. A semiautomatic rifle made by Freedom
brand Bushmaster was reportedly used during last Friday's
shooting rampage in Newtown, Conn.
... Hasbro (HAS) will debut a black-and-silver version of its
popular Easy-Bake Oven toy, in an effort to make the product more
gender neutral. New Jersey teen McKenna Pope collected 40,000
signatures protesting the traditional pink-and-purple model,
arguing the color scheme discourages those boys who also want to
cook a mediocre cupcake through the heat of a light bulb. Although
Pope recently delivered boxes of signatures to HAS headquarters,
company officials maintain the new color scheme has been in
development for the past 18 months.
Today's Top Tweet
"If you listen to the news, you'll hate this market. If you pay
attention to price action, you'll love this market $$"
5 Stocks We Were Watching Today
- Facebook (FB) call buyers
short-term bullish bets.
- A large-scale Nokia (NOK) put trader
to a higher strike.
- Advanced Micro Devices (AMD) speculators see
considerable upside ahead
- Toyota Motor (TM) rallied to
its highest point
since March 2011, despite a mixed pair of headlines.
- Soon-to-expire, near-the-money calls were the
options of choice
in Goldman Sachs Group (GS).
Question of the Day
: Are all in-the-money options automatically exercised?
: The Options Clearing Corporation (OCC) automatically exercises
any expiring equity options that close in the money by $0.01 or
more. Your specific brokerage, however, could have a different
threshold for automatic expiration, so you may wish to ask your
broker to determine: a) what this threshold is and b) what the
cutoff time is for requesting that an option
be automatically exercised at the close on Expiration Friday.
For a look at today's options movers and commodities
activity, head to page 2.
Oil futures moved higher for a third straight session, as the
January contract gained 73 cents, or 0.8%, to close at a two-week
best. Gold, meanwhile, lost some of its safe-haven luster;
February-dated gold shed $27.50, or 1.6%, to finish at $1,670.70 an
ounce, its lowest close in almost four months.
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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