Positive Economic Data Lifts Stocks to Strong Weekly Finish

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"Today's economic data was much better than yesterday's," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Both consumer confidence and leading indicators came in at five-year highs, which was all it took for the bulls to once again push stocks to new highs across the board." For its part, the Dow Jones Industrial Average (DJI) extended its trek into uncharted territory and closed with a solid triple-digit gain. "There are lots of concerns out there," Detrick continued, "but the reality is no one truly knows where this bull market will peak, and trying to pick a top is a foolish game."

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

plus...
  • Consumers are confident -- as is JPMorgan Chase ( JPM ) -- but long-term Ford Motor ( F ) traders see downside ahead.

Although the Dow Jones Industrial Average (DJI) , reversed Thursday's losses and then some, ending 121 points, or 0.8%, higher at 15,354.40. The index closed just shy of its intraday peak of 15,357.40, which was also a new all-time high. On a weekly basis, the Dow added 1.6%. JPMorgan Chase ( JPM ) paced the advancing majority today, with a gain of 2.6%, and 22 other Dow stocks also made their way into the green. Seven stocks declined, with Pfizer (PFE) bringing up the rear, down 1%.

It was also a record-setting day for the S&P 500 Index (SPX) , which added 17 points, or just over 1%, to close at its new all-time high of 1,667.47. The Nasdaq Composite (COMP) , meanwhile, hit a new 12-year high of 3,499.21 before settling at 3,498.97, up 33.7 points, or just shy of 1%. On a weekly basis, the SPX gained 2.1% and the COMP advanced 1.8%.

The CBOE Market Volatility Index (VIX) couldn't hold its perch above 13, as it shed 0.6 point today, or 4.7%, to settle at 12.45, back south of its 10-day moving average. This week, the VIX lost 1.1%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The big thing in today's market actually happened under the surface, as the U.S. dollar broke out to new highs," Detrick said. "There was a time when the S&P 500 Index (SPX) and dollar trended inversely, but that has been reversed in a big way this year. In fact, you could argue this is a sign things are getting back to 'normal,' as historically speaking, a strong currency usually meant a strong economy and stock market. What can you say -- the bulls are in charge and the U.S. economy is looking better. Things aren't perfect, but they sure aren't as bad as all those Harvard economists were telling us during the Fiscal Cliff mess late last year."

3 Things to Know About Today's Market :

  • Consumer confidence has surged this month, according to preliminary findings of the Thomson Reuters/University of Michigan consumer sentiment index, which popped to 83.7 from 76.4 in April. The reading -- the highest since July 2007 -- easily exceeded economists' expectations. (Reuters)
  • JPMorgan Chase ( JPM ) adjusted its outlook on the S&P 500 Index (SPX), projecting a year-end price target of 1,715 . The move represents an 8.5% jump from the firm's previous target of 1,580. (Barron's)
  • In order to side-step this weekend's encroachment of the debt ceiling, the U.S. Treasury Department has earmarked $260 billion in additional cash. This and other measures will enable the country to continue fulfilling its financial obligations on schedule through Labor Day. (CNBC)

5 Stocks We Were Watching Today :

  1. Long-term bears pounced on Ford Motor Company ( F ), even as the stock hit a new two-year high.
  2. Bank of America (BAC) caught the eye of long-term call buyers expecting continued upside.
  3. J.C. Penney Company (JCP) was a favorite among call buyers after its earnings report last night.
  4. AT&T Inc. (T) was initiated with an "equal weight" rating at Barclays today.
  5. Renren (RENN) hopefuls believe the stock is due for a comeback , and scooped up intermediate-term, in-the-money calls.

EARNINGS

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

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Crude futures closed higher today, helped along by stronger-than-expected domestic economic data. June-dated oil added 86 cents, or 0.9%, to settle at $96.02 per barrel. For the week, black gold edged down just 2 cents.

Gold, on the other hand, dropped for a seventh consecutive session, impacted by a continued rise in the U.S. dollar. Gold for June delivery fell $22.20, or 1.6%, to close at $1,364.70 an ounce. The precious metal has given back $109 over its losing streak, and shed 5% this week alone.

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: CSCO , F , HLF , JPM , STX

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