"The market caught its breath today after last week's explosive
gains," noted Schaeffer's Senior Technical Strategist Ryan Detrick,
Dow Jones Industrial Average (DJI)
traded in losing territory all day, but spent most of its time
within a 50-point range before closing off about 0.4%.
Continue reading for more on today's market, including
- Two broad-market
levels to watch
overhead, from Senior Trading Analyst Bryan Sapp.
- Facebook (
) speculators see
even more upside
- Schaeffer's contributor Adam Warner explores whether the
in the CBOE Market Volatility Index (VIX) means anything for the
- Big news from the banking sector, bullish speculation in
), and fun with math in our Tweet of the day.
Dow Jones Industrial Average (DJI)
undid Friday's gains and breached the 13,400 level, closing down 51
points, or 0.4%. One dozen of the Dow 30 finished with gains, led
by McDonald's (
), which tacked on 1.2%. While UnitedHealth Group (
) finished flat, Walt Disney (
) paced the 17 lagging issues, with a drop of 2.3%. The
entertainment conglomerate is
In a similar fashion, the
S&P 500 Index (SPX)
gave back 4.6 points, or 0.3%, while the
Nasdaq Composite (COMP)
had another day near breakeven, closing off 2.9 points, or
CBOE Market Volatility Index (VIX)
kept moving lower -- its fifth consecutive losing session. By the
close, the index was off 0.3%, or less than 0.1 point.
A Trader's Take
"When you consider fourth-quarter earnings are all set up to
start tomorrow when Alcoa (AA) reports, it makes sense that we saw
some selling today," explained Detrick. "The selling seemed rather
organized, though, and the fact that buyers stepped in late in the
session was a plus. Still," he continued, "the thing I'm most
excited about is the chance to talk about earnings for the next
several weeks instead of focusing on the fiscal-cliff drama."
3 Things to Know About Today's Market
- A group of 10 banks -- including Bank of America (BAC),
Citigroup (C) and Wells Fargo (WFC) -- will collectively pay $8.5
billion to settle foreclosure complaints. Roughly 400,000
homeowners that were ruled wrongfully foreclosed on will receive
recompense from a few hundred dollars to as much as
- In other banking news, BAC settled its own dispute with
Fannie Mae. BAC will pay the government-owned mortgage concern
more than $3.6 billion outright and will assume $6.75 billion in
bad loans that should never have been sold to Fannie Mae based on
lending criteria that existed at the time. Finally, BAC owes $1.3
billion in a separate settlement concerning foreclosure delays,
resulting in net settlement feeds of more than $11.6
- Apple Inc. (AAPL) hit a notable milestone today, as its App
Store facilitated its 40 billionth unique download. Currently,
the service has more than 500 million active users and 775,000
apps available for free download or purchase. An AAPL spokesman
boasted that developers have so far made more than $7 billion
from App Store sales.
... tonight's college football national championship is a showdown
between Notre Dame's Fighting Irish and the University of Alabama's
Crimson Tide. Notre Dame, however, can already boast victory on a
financial scale. While Notre Dame's football program earned a
profit of $43.2 million this season (behind Alabama's $45 million),
it will book $6.2 million for its appearance in the championship
game. Alabama, meanwhile, has to split a $23.6 million payout with
the other 13 members of the SEC conference.
Today's Top Tweet
"14,761: The level the DJIA would be trading at if all 30 [Dow]
stocks hit their average analyst price target."
(Bespoke Investment Group), 1:00 p.m.
5 Stocks We Were Watching Today
- Intel Corporation (
heavy buying action
in its short-term calls.
- A Sirius XM Radio (SIRI) trader
sold puts and shorted stock
as a delta-neutral short volatility play.
- ValueClick (VCLK) speculators
bet against the shares
, as the stock struggles with the round-number $20 level.
in VIVUS Inc. (VVUS) revved notably higher.
- Amazon.com (AMZN) hit a new 52-week peak after scoring an
from Morgan Stanley this morning.
Question of the Day
: Are there specific requirements a stock must meet before it can
have options listed?
: Each options exchange maintains its own set of rules, but the
basic criteria are standard across the board to ensure that options
contracts are liquid enough for public trading. Currently,
according to the Chicago Board Options Exchange (CBOE), a stock
must have closed north of $3 per share for five consecutive
sessions prior to listing options. The stock's float must consist
of at least 7 million shares and there must be at least 2,000
individual stockholders. Additionally, trading volume must have
totaled at least 2.4 million shares during the previous 12 months.
Finally, the stock itself has to be listed on a national securities
For a look at today's options movers and commodities
activity, head to page 2.
February-dated oil edged 10 cents higher today, rising 0.1% to
settle at $93.19 per barrel. Gold futures headed the opposite
direction, however, as the February contract shed $2.60, or 0.2%,
to end the session at $1,646.30 an ounce.
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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