"Today was a crazy one, with the late rally on rumors,"
exclaimed Schaeffer's Senior Technical Strategist Ryan Detrick. The
Dow Jones Industrial Average
navigated a range of nearly 180 points, spent time on both sides of
breakeven, breached the 13,000 level at one point, and closed --
somewhat astonishingly -- with only modest losses.
Continue reading for more on today's market, including
- A review of Tim Cook's earnings potential, an aggressive bet
on Facebook (
), and a good reminder for all contrarians in our Tweet of the
Dow Jones Industrial Average (DJIA)
went on a wild ride today, plunging to an intraday low of 12,964.08
in afternoon trading -- the index's first trip south of 13,000
since Dec. 5 -- but paring most of these losses in a late-session
show of strength. By the close, the average had given back 18.3
points, or 0.1%, and was perched back above the 13,000 round-number
mark. Six of its 30 components closed in the black, led by
), IBM (
), and Microsoft (MSFT), which all gained 0.4%. Bringing up the
rear was Cisco Systems (CSCO), with a loss of 1.4% on the day.
Coca-Cola (KO) was flat for the session.
Price action was similarly volatile for the
S&P 500 Index (SPX)
Nasdaq Composite (COMP)
. The SPX closed with a loss of 1.7 points (0.1%) after an early
visit to the 1,401.80 mark. The tech-rich COMP settled with a
modest pullback of 4.3 points, or 0.1%.
CBOE Market Volatility Index (VIX)
was little changed, down 0.01 point.
A Trader's Take
"Rumors, rumors, rumors," quipped Detrick. "We were down close
to 150 points [on the Dow] at the lows, then a rumor about a budget
vote on Sunday started to circulate. That was all it took. If you
are a bullish on this market," he continued, "you had to love
today's huge intraday reversal. We are nearing the final two
trading days of the year and normally that's a bullish time, but
this year is anything but normal! In the end, I think the best
thing about today is we are one day closer to finally getting some
type of fiscal-cliff resolution."
3 Things to Know About Today's Market
- With President Obama leaving his vacationing family to return
to budget talks in Washington, widespread anxiety intensified
over the perilously close fiscal cliff. Senate Majority Leader
Harry Reid, D-Nev., offered the disconcerting prediction that a
drop off the cliff is "where we're headed." Senator Reid also
blamed House Speaker John Boehner, R-Ohio, of running a
"dictatorship" and dismissing the majority's wishes. In response,
a Boehner spokesman advised Reid to "talk less and legislate
more." Sources indicated later in the day that House members
would return to business on Sunday to work on forging an
eleventh-hour solution. Elsewhere, Treasury Secretary Timothy
Geithner briefly grabbed the spotlight in order to warn that the
debt ceiling will also be reached on Monday.
- Initial jobless claims declined 12,000 last week to a
seasonally adjusted 350,000 (versus expectations for a rise to
365,000). A notable caveat from the Labor Department, however, is
that some of the results were estimated, due to vacation time
taken by state workers. Meanwhile, new home sales rose by 4.4% in
November from the previous month, hitting a seasonally adjusted
annual rate of 377,000 -- the highest reading since April 2010.
Economists were expecting a slightly more modest advance to
375,000. The Conference Board's consumer confidence index,
however, plunged to 65.1 this month versus a downwardly revised
71.5 in November, a steeper decline than the projected drop to
- Apple Inc. (AAPL) CEO Tim Cook absorbed quite a slash to his
compensation in 2012, after a hefty payout in 2011 that included
1 million AAPL shares (that will vest at a later date). But don't
feel too bad for the guy -- Cook still banked $1.4 million in
salary, a bonus of $2.8 million, and various other monetary
benefits such as 401(k) contributions from the company.
... Time Warner Cable (TWC) is reportedly testing a system wherein
technicians would report for duty within a one-hour estimated
window (versus the four-hour time block currently used). In early
tests, the 60-minute time period was honored 98% of the time. Cosmo
Kramer would be so proud.
Today's Top Tweet
"If I find myself thinking like everyone else, or agreeing with
everyone ... that's usually a sign I need to change my
5 Stocks We Were Watching Today
- Amazon.com (AMZN) took the
in a customer satisfaction survey about online shopping.
- Facebook Inc (
a short-term decline in the shares.
- Deckers Outdoor (DECK) speculators
opened out-of-the-money calls
to wager on short-term upside.
- Teva Pharmaceutical (TEVA) dropped to a
and continues to battle technical resistance.
- ON Semiconductor (ONNN) has been
luring bearish traders
to its options pits.
Question of the Day
: Will 2012 options volume surpass 2011 levels?
: According to the Options Clearing Corporation (OCC), total
options trading volume reached nearly 4.6 billion contracts in
2011, topping 2010 figures by 17%, clearing the 4 billion threshold
for the first time, and setting a ninth consecutive annual record.
This year, however, total option volume is likely to drop for the
first time since 2002. Current data from the OCC shows total
options volume of 3.72 billion contracts.
For a look at today's options movers and commodities
activity, head to page 2.
Oil futures inched lower on Thursday, with the February contract
edging down 11 cents, or 0.1%, to $90.87 per barrel. Meanwhile,
February-dated gold rose by $3 -- 0.2% -- to settle at $1,633.70
per ounce as the yellow metal benefited from its "safe haven"
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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