"We had some mixed economic data, but the bulls' ability to push
things higher later in the day was impressive," noted Schaeffer's
Senior Technical Strategist Ryan Detrick, CMT, at the end of a
mixed session. The
Dow Jones Industrial Average (DJI)
slowly fought its way into positive territory by the close,
settling with a minor 0.2% gain. The tech sector was not as
fortunate, as two of its heavy hitters -- Apple Inc. (
) and Facebook (
) -- moved lower after an
and a highly watched product announcement, respectively.
Continue reading for more on today's market, including
- A warning from Fitch Ratings, bullish trading activity on
), and a sarcastic response to Facebook's big reveal in our Tweet
of the day.
Dow Jones Industrial Average (DJI)
explored a range of roughly 100 points during the session, gapping
near its intraday low at the open and settling just shy of its
intraday peak. By the close, the index had gained 28 points, or
0.2%. Seventeen of the Dow's 30 components moved higher, with
) taking top honors with a 1.2% gain. Fellow tech bellwether
Hewlett-Packard (HPQ) paced the 12 laggards with a 2.5% drop, and
Alcoa (AA) was unchanged on the day.
S&P 500 Index (SPX)
charted a similar path as the Dow, closing up 1.7 points, or 0.1%,
to end the day near its session high. Notably, the index came
within 1 point of its annual peak of 1,474.51 during afternoon
trading. Elsewhere, the
Nasdaq Composite (COMP)
was dragged lower by some of its mega-cap components, ending the
day with a loss of 7 points, or 0.2%.
The CBOE Market Volatility Index (VIX) started the day solidly
higher but closed with only a fractional gain after losing steam in
the late afternoon. By the closing bell, the VIX had added less
than 0.1 point, or 0.2%.
A Trader's Take
"Today's price action in retail stocks was great," observed
Detrick. "Retail sales came in better than expected and the SPDR
S&P Retail ETF (XRT) rose more than 2%. We've seen lots of talk
about the economy slowing down, especially lots of paychecks a
little bit less this year thanks to our government," he quipped,
"but you have to be very impressed with retail stocks here and
their ability to continually shake off bad news. Meanwhile,"
Detrick added, "we all know the market is over-extended on a
near-term basis and is 'due' for a pullback. Yet -- with nearly
everyone expecting this -- wouldn't it be something if Mr. Market
keeps on moving higher?"
3 Things to Know About Today's Market
- Today's highly anticipated FB media announcement debuted not
a smartphone -- as some technophiles had hoped -- but a new
internal search system. The technology, referred to as "graph
search," will allow FB users to search their content to quickly
determine, for example, which Facebook friends live in Boston, or
how many "liked" the movie
Big Momma's House 2
. The new functionality launched today in beta; interested FB
members are being invited to
for a graph-search waiting list.
- Retail sales rose by 0.5% to a seasonally adjusted $415.70
billion last month, the Commerce Department reported. This was a
pleasant surprise to economists, who had projected a more modest
rise of 0.2%. Elsewhere, the Labor Department reported a
seasonally adjusted 0.2% drop in the producer price index (PPI),
amid falling gasoline and food prices. Economists had targeted a
0.1% decline. The core PPI -- which excludes gasoline and food
costs -- ticked 0.1% higher.
- Ahead of the opening bell, Fitch Ratings warned policymakers
that continued failure to raise the debt ceiling would force a
formal review of the nation's sovereign ratings, adding that this
evaluation would come with "highly uncertain" consequences.
... Samsung earned the distinction of becoming the most-tweeted
brand at the annual International Consumer Electronics Show (CES)
in Vegas last week. The Korean electronics name was popular across
the social media platform as it unveiled several new products,
including a flexible cell phone and a curved television. Including
former U.S. President Bill Clinton in its keynote address didn't
hurt the company's buzz, either. Other brands seeing plenty of
Twitter activity during the four-day show were Sony, Panasonic, and
Today's Top Tweet
"I just met my new fiancé on the social graph! We're registered
at FarmVille. $FB"
(Downtown Josh Brown), 1:26 p.m.
5 Stocks We Were Watching Today
- Facebook Inc (
) was targeted by
short-term call buyers
before the company's product announcement hit the newswires.
- Recent buyout rumors inspired some
in Dell Inc. (DELL) today.
- Cisco Systems (
) traders bet on
- Option traders
opened bullish positions
on Morgan Stanley (MS) ahead of the company's earnings
- NIKE, Inc. (NKE) saw heavy trading on
as speculators bet on a retreat in the shares.
Question of the Day
: What is the "January effect?"
: This refers to the tendency for stock prices to collectively rise
during the first month of the year. The primary, though unproven,
theory behind this phenomenon is that traders who sell out of
positions in December for tax purposes are ready to re-enter the
market when the calendar turns. Another theory is that holiday or
year-end bonuses are committed to stocks during January. We are
halfway through the month, and the broader market (as tracked by
the S&P 500 Index), is up roughly 3.2%.
For a look at today's options movers and commodities
activity, head to page 2.
Economic concerns from home and abroad impacted crude oil
futures today as the February contract gave back $0.86, or 0.9%, to
settle at $93.28 per barrel. On the metals front, February gold
futures jumped up $14.50, or 0.9%, to $1,683.90 an ounce.
Meanwhile, platinum prices were notably higher on Tuesday (gaining
almost 2% in the front-month series), to overtake gold prices for
the first time in 10 months. The largest producer of the metal said
it would halt operations at a number of South African mines,
cutting annual production by 15%.
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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