As investors took some profits off the table and digested the
day's various economic reports, the
Dow Jones Industrial Average (DJI)
took a step back, closing off roughly 21 points. "It made sense for
the market to take a little breather after yesterday's huge rally,"
Schaeffer's Senior Equity Analyst Joe Bell noted, "so the slight
pullback was not a shock."
Continue reading for more on today's market, including
- A preview of tomorrow's job numbers, good news for Netflix (
), and our Tweet of the day, which cites a smart contrarian
Dow Jones Industrial Average (DJI)
spent the majority of today's session south of breakeven, as a
quick trip into positive territory was cut short by the Fed-minutes
news. The blue-chip average closed off its intraday low of
13,358.30 to finish with a loss of 21.2 points, or close to 0.2%. A
dozen of the 30 components finished higher on the day, led by Merck
), which rallied 2.4%. The worst performer was UnitedHealth Group (
), as it surrendered 4.7% following a
from Deutsche Bank. Coca-Cola (KO) ended flat for the session.
In similar fashion, the
S&P 500 Index (SPX)
, lost 3.1 points in Thursday's trading, shedding 0.2%, while the
Nasdaq Composite (COMP)
lagged its peers, dropping 11.7 points, or 0.4%.
Despite the market's pullback, the
CBOE Market Volatility Index (VIX)
still continued to drift lower, inching down 0.1 point, or
A Trader's Take
"We got a slew of economic reports related to the labor market
today, but most of them failed to impress and didn't inspire much
buying," Bell observed. "What was a little unexpected, though, was
the information from the Fed minutes, which basically revealed that
several members saw a need to halt QE efforts well before the end
of 2013. This news," Bell reported, "was met with an increase in
selling pressure toward the end of the day."
3 Things to Know About Today's Market
- Minutes from the most recent Federal Open Market Committee
(FOMC) meeting reveal some disparity regarding when the central
bank should discontinue its bond-buying efforts. The report noted
that while some hawkish members prefer to halt the efforts
immediately, those who want to continue them are of two schools
of thought as well, divided between those who want to complete
asset purchases "sometime around the middle of 2013," and those
who think the purchases should extend further.
- In a preview of coming events (tomorrow's nonfarm payrolls
numbers), Automatic Data Processing (ADP) said the private sector
added 215,000 jobs last month (on a month-over-month basis),
while November's figure was revised higher to show a total gain
of 148,000 jobs. The December number exceeded economists'
expected increase of 150,000. Elsewhere, Challenger, Gray &
Christmas said there were 523,362 job cuts in 2012, down 14% from
2011, and the lowest total on record in 15 years.
- Google Inc (GOOG) executives are off the hook as far as the
Federal Trade Commission (FTC) is concerned. For nearly two
years, the FTC had been investigating the Internet search king
for antitrust abuses, including favoring its own products (such
as Google shopping) when populating search results. The agency
concluded that no laws had been violated, but Google has agreed
to relax its technology licensing practices in order to "allow
competitors access ... to patents on critical standardized
technologies needed to make popular devices," an FTC statement
... Twitter is now valued at more than $11 billion, at least
according to one analyst who tracks the secondary markets. Fueling
the site's perceived value are rumors that Apple Inc. (AAPL) may be
interested in purchasing it. As recently as December 2010,
Twitter's value was estimated at $3.7 billion. While there are
hopes that another high-profile IPO could be looming, Twitter's CEO
recently said there are no plans to take the company public.
Today's Top Tweet
"Mark Weinstein (Market Wizard): 'Be your own person. Think
against the herd, as they must lose in time' $$"
(BCarter), 10:03 a.m.
5 Stocks We Were Watching Today
- Netflix (
benefited from a price-target hike
from BMO, which lifted its 12-month outlook by $23 to $88.
- Las Vegas Sands (LVS) bulls
expect a sharp rally
in the coming weeks.
- eBay (EBAY)
caught the interest
of out-of-the-money call buyers with a short-term view.
- Microsoft Corporation (MSFT)
an entertainment-technology startup as it looks to improve its
- Boston Scientific (BSX) call buyers
are banking on
Question of the Day
: What are the "Dogs of the Dow"?
: The "Dogs of the Dow" theory is
-- as is one notion -- simply a grouping of the worst-performing
names from the Dow Jones Industrial Average. Rather, it's the 10
Dow names with the highest dividend yields (dividend amount
relative to stock price). As yield and price are inversely related,
high yields often go hand in hand with some of the worst performers
(hence, the popular misconception). Still, a popular strategy at
the beginning of the year is to buy the 10 "Dog" stocks in hopes
that these underperformers bottom out and produce gains. In fact,
Bank of America (BAC) just went from worst to first, turning in the
poorest performance among Dow stocks in 2011 ,and then emerging as
the best Dow name in 2012.
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures settled lower on Thursday, as the February-dated
contract gave back 20 cents, or 0.2%, to $92.92 per barrel. The
yellow metal also lost ground, as February-dated gold slipped
$14.20, or 0.8%, to settle at $1,674.60 per ounce.
At the end of every market day, the staff at Schaeffer's
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major events and key market developments. Don't miss this
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