"Once again, we saw early selling pressure met with a flood of
buying, as markets finished well off their intraday lows," said
Schaeffer's Senior Equity Analyst Joe Bell, CMT. "There wasn't a
whole lot of news today, as earnings season is winding down, and
many people are awaiting the next Fed meeting." Likewise, the
Dow Jones Industrial Average (DJI)
recovered from earlier losses to finish solidly in the black.
Continue reading for more on today's market, including
- Schaeffer's Senior Trading Analyst Bryan Sapp points out a
"head and shoulders" pattern
forming on the S&P 500, and offers up a bearish trading idea
for Amazon.com (
- This week's
three commodity stocks
with heavy option volume and contrarian trading potential.
attracted a bevy of front-month bulls, as well as one bearish
Investors were somewhat assuaged by a Fed official's comments,
a proposed merger between US Airways (
) and AMR Corporation hit a snag, and Cisco Systems (
) scored a price-target hike ahead of earnings.
Dow Jones Industrial Average (DJI - 15,451.01)
dropped to an intraday low of 15,342.34 within the first hour of
trading, but managed to claw its way into the green to finish 31.3
points, or 0.2%, higher. Hewlett-Packard's (
) 2.1% gain -- which was triggered by a bullish brokerage note --
led the Dow's 16 advancers, while Alcoa (AA) and Microsoft (MSFT)
paced the 14 decliners, each losing 1.3%.
S&P 500 Index (SPX - 1,694.16)
rebounded from its session lows, tacking on 4.7 points, or 0.3%, by
the close. Meanwhile, the
Nasdaq Composite (COMP - 3,684.44)
also ended in positive territory, advancing 14.5 points, or
CBOE Market Volatility Index (VIX - 12.31)
rose to an intraday high of 13.37 this morning, but ended the
session 0.5 point, or 3.9%, lower.
A Trader's Take
"Although most of earnings season is finished, many large
retailers are set to report their results tonight, which should
garner a lot of attention," Bell continued. "Consumer discretionary
names have been incredibly strong, and it will be interesting to
see if they can maintain their momentum."
3 Things to Know About Today's Market
- Wall Street found a bit of comfort in
Dennis Lockhart's speech
today, even though the Atlanta Fed president admitted that the
central bank could start to taper current stimulus measures
within the next few meetings. However, he also noted, "I don't
expect to have enough data to be sure of my outlook [in
September]. For that reason, I don't think a decision that
commits the Fed to a full phase-out of asset purchases and lays
out a precise, beginning-to-end path for doing so would be
- The Commerce Department said
rose by a weaker-than-expected 0.2% in July, due largely to a
significant drop in auto sales. Still, the latest figure marked a
fourth consecutive monthly increase. Excluding autos, sales
climbed by 0.5%.
- A proposed $11-billion merger between
US Airways (
) and AMR Corporation
is being challenged by the Justice Department and a handful of
state attorneys general, but the two companies aren't giving up
without a fight. In a joint statement, LCC and the American
Airlines' parent said, "We will mount a vigorous defense and
pursue all legal options in order to achieve this merger and
deliver the benefits of the new American to our customers and
communities as soon as possible."
5 Stocks We Were Watching Today
- Canaccord Genuity upwardly revised its price target for
ahead of tonight's quarterly earnings report.
First Solar's (FSLR)
front-month series of options attracted both call and put
players, amid today's negative price action.
- As Wall Street awaits the latest iPhone debut,
near-term traders scooped up August calls.
- Bearish speculators continued to zero in on
AK Steel (AKS)
, and wagered on extended losses by December expiration.
- Northland Capital raised its price target for
Cisco Systems (
ahead of tomorrow's post-close turn in the earnings
For a look at today's options movers and commodities
activity, head to page 2.
Crude oil futures climbed for a third straight day, buoyed by
anxieties regarding oil exports from Libya, as well as expectations
of a decline in tomorrow's crude inventories report. By the close,
September-dated crude added 72 cents, or 0.7%, to settle at $106.83
Conversely, gold futures snapped a four-day winning streak, due
to a stronger dollar and lingering concerns over when the Fed will
scale back its bond-buying program. The December-dated contract
shed $13.70, or 1%, to end at $1,320.50 an ounce.
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