Stocks Little Changed, as S&P 500 Hovers Near Critical Level

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"In a repeat of the previous two days, the S&P 500 Index (SPX) flirted with new all-time highs, but just couldn't break through," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "We've been saying 1,850 was a big area on the SPX, and that sure has been the case. It is encouraging that the market isn't just dropping hard from this level, but is instead pausing, which is a plus. Not to mention the fact that small-caps led again today. With the Russell 2000 Index (RUT) breaking out to new highs, you have to like that. Overall, it looks like only a matter of time before the SPX makes new highs. Perhaps a little more dancing around these levels -- although frustrating to both bulls and bears -- is necessary." Meanwhile, the Dow Jones Industrial Average (DJI) trended above the breakeven mark for most of the day, before settling with a slight gain.

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

Plus ... Strong housing data, dovish comments from a Federal Reserve official, and a massive bullish trade in Verizon Communications Inc. ( VZ ).

The Dow Jones Industrial Average (DJI - 16,198.41) spent most of the day in positive territory, before settling with a modest gain of 18.8 points, or 0.1%. Wal-Mart Stores, Inc. ( WMT ) led the Dow's 17 advancers with a gain of 2%, while McDonald's Corporation ( MCD ) brought up the rear, losing 0.8% today. Johnson & Johnson (JNJ) was unchanged.

The S&P 500 Index (SPX - 1,845.16) edged up a fraction by the closing bell, rising 0.04 point. At its intraday peak, the SPX overcame the 1,850 mark to touch 1,852.65. The Nasdaq Composite (COMP - 4,292.06) neared a new 14-year high in intraday trading and settled up 4.5 points, or 0.1%.

The CBOE Volatility Index (VIX - 14.35) gained ground during the session, closing 0.7 point, or 5%, higher.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The best thing about today's market was easily housing. New home sales numbers came out today," Detrick observed, "and they were great. We've heard so much about how the bad weather has put a damper on any and all economic data. Well, today's report was a nice change, as it shows some real growth in the face of other disappointing reports. The bottom line is that housing is a group we've liked so far this year, and after today's action, many of the stocks broke out to new highs. With housing and small-caps leading, that bodes well for the overall market here. At the same time, financials continue to lag, which is the one big problem area."

5 Items on Our Radar Today :

  1. New home sales spiked 9.6% in January to reach their highest level since mid-2008 , a seasonally adjusted annual rate of 468,000 units. One notable pocket of strength was the Northeast, where sales surged 73.7% despite brutal winter weather patterns. (FOX Business)
  2. Eric Rosengren, head of Boston's Federal Reserve Bank, noted today that the central bank shouldn't rush to reverse monetary stimulus efforts in response to the recent drop in unemployment. "Monetary policy should continue to be accommodative," he argued, "supporting a return to full employment, given the very low inflation rates." Rosengren disagreed with the majority's decision to begin tapering asset-buying plans in December. (Reuters, via CNBC)
  3. Target Corporation (TGT) issued its fourth-quarter earnings report , which was negatively impacted by the data breach suffered during the holiday shopping season. Net income dropped 46%, but still managed to top analysts' estimates. The retailing giant warned that continued expenses related to the breach could weigh on future earnings. (Los Angeles Times)
  4. A Verizon Communications Inc. ( VZ ) bull placed a $1.75 million bet targeting a move higher in the next two months.
  5. Outperforming Walgreen Company (WAG) has nevertheless been targeted by two types of put traders in recent weeks.

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 :

Crude oil prices moved higher today, on news that supplies grew by less than expected. April-dated futures rose 76 cents, or 0.8%, to $102.59 per barrel.

Gold futures pulled back for the first session in four, amid better-than-expected home sales data. By the close, gold for April delivery had surrendered $14.70, or 1.1%, to rest at $1,328 an ounce.

SCHAEFFER'S MARKET POSTURE



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This article appears in: Investing , Options

Referenced Stocks: TWTR , FB , VZ , WMT , MCD

Schaeffer's Investment Research

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