Stocks Recover from Morning Malaise to Close with a Win

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"Even though today was a very light-volume bounce, we saw Friday's strength ultimately carry through," summarized Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Monday is usually a weak day, and last Monday was a total bloodbath. So it was nice to see we bucked that trend today." After a slow start, the Dow Jones Industrial Average (DJI) enjoyed an afternoon recovery to close slightly higher, though it lagged its index peers.

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

plus...
  • S&P 1,550 is back in play, European investors cheer stability in Italy, and the options market has high expectations for Netflix ( NFLX ).

After losing nearly 90 points during the first hour of trading, the Dow Jones Industrial Average (DJI) managed to pull itself into positive territory by the close, finishing up 19.7 points, or 0.1%, at 14,567.17. Of the Dow's 30 members, 18 closed in the black on the day, led by Microsoft Corporation ( MSFT ), which continued to rally after Thursday evening's earnings report, adding 3.6%. Pacing the dozen decliners was General Electric ( GE ), off 1.8%.

The S&P 500 Index (SPX) dipped just south of the supportive 1,550 level in mid-morning trading, but this round number wasn't going down without a fight. By the close, the S&P had bounced back 7.3 points, or 0.5%, to settle at 1,562.50. Elsewhere, the Nasdaq Composite (COMP) outperformed its contemporaries, rallying 0.9%, or 27.5 points, to close at 3,233.55.

The CBOE Market Volatility Index (VIX) continued its backslide from Friday, shedding 0.6 point, or 3.9%, to end the session at 14.39. Since Thursday's close, the VIX has dropped more than 18%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"We will be hit with hundreds of earnings reports over the next few days," Detrick noted. "The general consensus so far this earnings season is revenue has been light and guidance has been weak. After the huge bounce we've seen to start the year, earnings had better pick it up to justify some of the valuations out there."

3 Things to Know About Today's Market :

  • The National Association of Realtors reported that existing home sales slumped 0.6% in March to a seasonally adjusted annual rate of 4.92 million. Economists had been expecting the sales figure to rise to 5.01 million units. Year-over-year, the median sale price for an existing home rose 11.8% last month to $184,300. (CNBC)
  • Dow component Caterpillar (CAT) disappointed the Street with its first-quarter earnings news today, as per-share results and revenue both fell short of estimates. For the full fiscal year, CAT reduced its earnings and revenue outlooks. The stock slumped into the red early on but quickly recovered, closing up nearly 3%. (Forbes)
  • Stocks gained across the pond after Giorgio Napolitano was easily re-elected as Italy's president. At 87 years old, he became the first Italian president in history to win a second term. (BBC News)

5 Stocks We Were Watching Today :

  1. Ahead of Netflix Inc. ( NFLX ) earnings tonight, the options market was pricing in a significant move .
  2. Exxon Mobil (XOM) bulls believe a new all-time high is in the cards by this fall.
  3. Bears swarmed Molycorp (MCP), snatching up puts in the newly front-month May series.
  4. EMC Corporation (EMC) speculators bought out-of-the-money puts ahead of the company's earnings report.
  5. NIKE, Inc. (NKE) saw a price-target hike at UBS this morning.

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 futures rose on Monday, following an afternoon rebound in stocks. Oil for May delivery closed its final day of trading up 75 cents, or 0.9%, at $88.76 per barrel.

Gold futures also advanced, as continued demand from bargain hunters offset a downwardly revised 2013 price forecast from Barclays. June-dated gold tacked on $25.60, or 1.8%, to end the session at $1,421.20 per ounce.

SCHAEFFER'S MARKET POSTURE

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 critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.



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.

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This article appears in: Investing , Options

Referenced Stocks: GE , MSFT , NFLX , QCOM , WMB

Schaeffer's Investment Research

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