Stocks Finish Higher Despite Budget Meeting Postponement

By
A A A

"It's no big shock, but today has once again been all about Washington," said Schaeffer's Senior Equity Analyst Joe Bell, CMT. "This morning, shares sold off sharply after officials failed to come to an agreement on the debt ceiling and government shutdown. The poor price action didn't last long, though, as shares rallied after speculation that President Barack Obama and lawmakers from both sides were meeting at the White House." Although this meeting ended up being postponed, the Dow Jones Industrial Average (DJI) finished solidly north of breakeven.

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

  • Schaeffer's Senior Trading Analyst Bryan Sapp explains why "stocks look poised for more upside," barring any negative developments this week.
  • In his latest Chart of the Day , our Senior Options Strategist Tony Venosa, CMT, takes a closer look at trading prospects for Steel Dynamics ( STLD ).
  • This week's edition of Brand Face-Off covers two outperforming solar stocks that could benefit from lingering skepticism.
plus...
    A meeting between President Barack Obama and congressional leaders was postponed, Netflix ( NFLX ) climbed higher on cable partnership talks, and Advanced Micro Devices ( AMD ) scored some bullish analyst attention ahead of earnings.

The Dow Jones Industrial Average (DJI - 15,301.26) faltered right out of the gate, touching an intraday low of 15,136.38 within the first five minutes of trading. By the close, however, the index was up 64.2 points, or 0.4%. The Dow's 22 advancers were led by Pfizer's ( PFE ) 2.2% gain, while Merck's ( MRK ) 1.1% decline paced the eight laggards.

The S&P 500 Index (SPX - 1,710.14) followed a similar intraday path as its blue-chip brethren, finishing 6.9 points, or 0.4%, higher. Meanwhile, the Nasdaq Composite (COMP - 3,815.27) added 23.4 points, or 0.6%.


Conversely, the CBOE Volatility Index (VIX - 16.07) spiked at the start of the session, but pared its gains to close just 0.4 point, or 2.2%, above breakeven.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Despite the continued confusion coming from Washington, this market has remained incredibly resilient," Bell went on. "In fact, the Russell 2000 (RUT) touched a new all-time high, as small-caps continue to show strong leadership."

3 Things to Know About Today's Market :

  • President Barack Obama told reporters today that while "progress" has been made toward a deal to raise the debt ceiling before the Oct. 17 deadline, he cautioned that nothing is final "until the details are done." However, this afternoon's meeting with bipartisan congressional leaders was postponed to "allow leaders in the Senate to continue to make important progress towards a solution that raises the debt limit and reopens the government," according to the White House. (USA Today, MarketWatch)
  • Netflix ( NFLX ) trended higher today, amid buzz that the streaming video service is in talks to provide content to a few cable providers , according to inside sources. Negotiations with Suddenlink Communications are allegedly underway, while preliminary discussions have also transpired with Comcast (CMCSA) and Time Warner Cable (TWC). By creating ties with cable companies, NFLX would enable viewers to find content without switching to a different device. (Bloomberg)
  • Eugene Fama, Lars Peter Hansen, and Robert Shiller found themselves in the limelight, as the trio was awarded the 2013 Nobel prize for economics . Fama and Hansen are professors at the University of Chicago, while Shiller -- of the S&P/Case-Shiller housing price index fame -- is a professor and fellow at Yale University. "There is no way to predict the price of stocks and bonds over the next few days or weeks," said the Royal Swedish Academy of Sciences, "but it is quite possible to foresee the broad course of these prices over longer periods, such as the next three to five years. These findings ... were made and analyzed by this year's Laureates." (Chicago Tribune)

5 Stocks We Were Watching Today :

  1. Advanced Micro Devices ( AMD ) received some bullish analyst attention this morning, ahead of Thursday's turn in the earnings confessional.
  2. Near-term option buyers set their sights on Apple (AAPL) , with a particular focus on the tech giant's October-dated calls.
  3. Wells Fargo (WFC) was hit with a round of price-target cuts, despite reporting stronger-than-expected quarterly earnings last Friday.
  4. Weekly put activity surged on Wal-Mart (WMT) , as the retailer prepares for tomorrow's annual investment community meeting.
  5. Intel (INTC) saw a spike in put volume, as speculators forecast a decline following tomorrow's quarterly earnings report.

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 oil finished slightly higher today, lifted by hopes that talks between President Barack Obama and congressional leaders would result in a debt-ceiling resolution. By the closing bell, the November contract added 39 cents, or 0.4%, to end at $102.41 per barrel.

Gold futures also advanced, fueled by the same optimism for an end to the debt-ceiling stalemate. December-dated gold rose $8.40, or 0.7%, to finish at $1,276.60 an ounce.

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: AMD , MRK , NFLX , PFE , STLD

Schaeffer's Investment Research

Schaeffer's Investment Research
  • See all for Schaeffer's Investment Research
  • View Print Version

More from Schaeffer's Investment Research:

Related Videos

Stocks

Referenced

Most Active by Volume

95,213,068
  • $117.66 ▲ 7.81%
48,554,418
  • $15.40 ▼ 1.47%
43,909,438
  • $49.02 ▲ 2.15%
37,680,730
  • $42.25 ▼ 0.96%
34,979,328
  • $6.795 ▼ 8.79%
25,897,564
  • $99.76 ▼ 3.09%
23,232,343
  • $33.13 ▲ 0.98%
21,853,473
  • $24.36 ▲ 14.53%
As of 1/28/2015, 12:57 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com