Stocks End Mixed After Debt Ceiling Deal; S&P 500 Closes at New High

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"Congress was finally able to come to an agreement late yesterday, and the potential fallout from the debt ceiling was avoided at the last minute," said Schaeffer's Senior Equity Analyst Joe Bell, CMT. "While many view this as nothing more than just pushing back the decision, the markets now have a little bit of clarity for the time being. Today's market reaction was widely mixed, as we're really starting to get into earnings season." The Dow Jones Industrial Average (DJI) was the session's laggard, while the S&P 500 Index (SPX) claimed new technical milestones.

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

plus...
    A Fed leader offered his thoughts on the tapering topic, weekly jobless claims fell less than expected, and a poorly received earnings report for International Business Machines ( IBM ) triggered some negative analyst attention.

The Dow Jones Industrial Average (DJI - 15,371.65) tumbled to a session low of 15,229.02 at the sound of the opening bell, and despite narrowing its losses throughout the day, the index still finished 2.2 points lower. The Dow's 24 advancers were led by American Express ( AXP ), which gained 5.1% on strong earnings, while International Business Machines ( IBM ) paced the six decliners, as its own quarterly report spurred a drop of 6.4%.

Although the S&P 500 Index (SPX - 1,733.15) fell at the start of the session, it muscled back into positive territory later in the day to tag a new all-time intraday high of 1,733.45. By the end, the index was up 11.6 points, or 0.7% -- notching a record closing peak, as well. Not to be outdone, the Nasdaq Composite (COMP - 3,863.15) finished with a gain of 23.7 points, or 0.6%, and touched another 13-year intraday high of 3,863.49.

Elsewhere, the CBOE Volatility Index (VIX - 13.48) spent the day in the red, dropping to a session nadir of 12.89 during the first hour of trading. By the time the dust settled, the "fear barometer" was off 1.2 points, or 8.4% -- marking its lowest finish since Sept. 20.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The Washington drama might finally take a backseat to earnings," Bell went on. "With the third-quarter earnings season getting underway, it will be nice to have a little attention on company performance, rather than political debates and press conferences."

3 Things to Know About Today's Market :

  • A last-minute debt ceiling deal may have put an end to the 16-day government shutdown, but as President Barack Obama put it, "There are no winners here." After signing off on the temporary bill to avoid default, the commander in chief surmised that "the American people are completely fed up with Washington," and called for Congress to take a "balanced approach" on further budget negotiations to "free up resources for things that do help the country grow." (CNN)
  • With the debt ceiling crisis (temporarily) out of the spotlight, the tapering chatter has resumed. Charles Evans -- a voting member of the Federal Open Market Committee (FOMC) -- noted that it's still too soon for the central bank to start easing its bond-buying program. "The data are still not definitive enough to say that now is the time to adjust the QE3 flow purchase rate," said the Chicago Fed president during a speech delivered at a real estate conference in Madison, Wis. (MarketWatch)
  • The Labor Department said initial jobless claims fell by 15,000 last week to a seasonally adjusted 358,000 -- surprising economists who were expecting a drop to 335,000. However, this latest figure may be off due to computer issues in California. Meanwhile, the four-week moving average for first-time unemployment filings increased by 11,750 to 336,500. (CNBC)

5 Stocks We Were Watching Today :

  1. A stronger-than-expected quarterly earnings report for American Express ( AXP ) triggered a round of bullish brokerage notes.
  2. Near-term traders wagered on a post-earnings move for Google ( GOOG ) by snapping up front-month calls and puts.
  3. International Business Machines ( IBM ) received some downbeat analyst attention, after its quarterly revenue fell short of consensus estimates.
  4. Short- and longer-term put players swarmed Micron Technology ( MU ) , with both groups betting on a decline for the security.
  5. As earnings loom, Groupon (GRPN) speculators placed bearish bets by purchasing November-dated put options.

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 :

A larger-than-anticipated spike in oil supplies dragged crude futures lower today, along with concerns regarding the effect the government shutdown will have on the economy. By the time the closing bell rang, the November contract shaved off $1.62, or 1.6%, to end at $100.67 per barrel -- the lowest settlement since July 2.

Conversely, gold futures gained more ground, thanks to the 11th hour debt ceiling deal reached by congressional leaders. December-dated gold surged $40.70, or 3.2%, to finish at $1,323 an ounce -- the malleable metal's highest close in more than a week.

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.

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This article appears in: Investing , Options

Referenced Stocks: AXP , FB , GOOG , IBM , MU

Schaeffer's Investment Research

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