SPX Snaps Winning Streak, Ends Near Bull-Bear Battleground

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After notching notable gains in the holiday-shortened week, traders returned to familiar fiscal-cliff storm clouds, with the Dow Jones Industrial Average (DJI) treading red ink throughout the day. However, the uncertainty was far from a domestic issue; euro-zone ministers convened to discuss another round of aid for Greece. Against this backdrop, and despite reports of a record Black Friday weekend, the Dow surrendered its perch atop the 13,000 level, while the S&P 500 Index (SPX) snapped its five-session winning streak.

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The Dow Jones Industrial Average (DJIA) was down more than 100 points at its session low, but found an intraday foothold in the 12,900 area. By the close, the blue-chip barometer gave up 42 points, or 0.3%, breaching both the 13,000 level and its 200-day moving average. Among the Dow's 30 components, Hewlett-Packard ( HPQ ) led the eight advancing equities, tacking on 2.4%, while American Express ( AXP ) and Coca-Cola ( KO ) led the bearish majority, shedding 1.5% apiece.

The S&P 500 Index (SPX) also pared its losses in afternoon action, settling on a deficit of 2.9 points, or 0.2%, to halt its five-day rally. On the other hand, the Nasdaq Composite (COMP) clawed its way out of the red, advancing 9.9 points, or 0.3%, to end a second straight session atop its 20-day trendline.


The CBOE Market Volatility Index (VIX) spent the day comfortably north of breakeven, adding 2.4% by the close.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take

"There are continued worries out of Europe and Greece, but the major indices are also facing overhead resistance from their former May high and October low," said Schaeffer's Senior Equity Analyst Joe Bell. "Congress is also coming back from Thanksgiving vacation, and the fiscal-cliff issues will once again take center stage in the coming weeks."

There were a few bright spots today, though. "Technology stock holders had a lot to cheer about, as Apple ( AAPL ) and several tech stocks led the broad market. Considering the strong run-up we've had during the past several days, today's sell-off isn't all that surprising as people come back from the holiday weekend."

Economic and Earnings News

The Chicago Fed's National Activity Index fell to -0.56 in October from zero in September, thanks in part to Hurricane Sandy-related production dips last month. The index's three-month moving average fell to -0.56 in October from -0.36 in September, marking its eighth straight negative reading and its lowest reading in nearly three years. A three-month trendline reading of -0.70 can portend domestic recessionary pressures, according to the Fed.

The Dallas Fed's manufacturing index fell to negative 2.8 in November, down from October's reading of 1.8. The drop below zero points to a contraction in Dallas-area factory activity during the month. Economists had their sights set markedly higher, with the consensus calling for a rise to 4.7.

STOCKS - EARNINGS

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In the Options Pits

STOCKS - MOVERS

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities

Crude futures settled slightly lower today, tracking a wobbly session for the equities market. With a truce still holding up in the Gaza Strip, and economists here at home predicting a weekly increase in crude stockpiles, traders found little motivation to buy black gold. Oil for January delivery gave up 54 cents, or 0.6%, to end the day at $87.74 per barrel.

It was an uneventful day for gold futures, as the precious metal took a bit of a breather following last week's heady gains. December-dated gold ended on a minor decline of $1.80, or 0.1%, at $1,749.60 per ounce.

SCHAEFFER'S MARKET POSTURE

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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.

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This article appears in: Investing , Options

Referenced Stocks: AAPL , AXP , FB , HPQ , KO

Schaeffer's Investment Research

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