Stocks rebounded yesterday after days of selling on positive
news regarding Ireland's debt problems, better unemployment
numbers, and a successful
General Motors Corporation
GM returned to trading on the NYSE following its
post-restructuring IPO. The stock was offered at $33, and opened
for trading at $35 before pulling back and closing at $34.19.
Ford Motor Co.
) fell 3.36% to $16.12.
Initial unemployment claims for the week ending Nov. 13 came in
lower than expected. But the Philly Fed Index for November improved
with a reading of 22.5 (from 1 in October). Economists had
predicted a reading of just 5. And leading economic indicators for
October rose 0.5%, which was slightly less than expected.
The yield on the 10-year Treasury note went up to 2.9%. The euro
rose against the U.S. dollar following better news from Ireland.
The euro was quoted late Thursday at $1.3628 versus $1.3515 on
At the close, the Dow Jones Industrial Average gained 173 points
at 11,181, the S&P 500 gained 18 points at 1,197, and the
Nasdaq rose 38 points to 2,514. The NYSE traded 1.2 billion shares
with advancers over decliners by more than 4-to-1. On the Nasdaq,
advancers led by 3-to-1 on volume of 560 million shares.
Crude oil for December delivery rose $1.41 to $81.85 a barrel.
Energy Select Sector SPDR
) closed at $63.06, up $1.36. December gold gained $16.10 to settle
at $1,353 an ounce, and the
PHLX Gold/Silver Sector Index
) rose 3.6 points to close at 210.79.
What the Markets Are Saying
After three days of hectic selling, buyers finally turned the
market and bounced the major indices from just above the dangerous
50-day moving average for each. The rebound resulted in a run back
to around the breakdown points of Tuesday, which for each index is
roughly at their respective20-day moving average.
But all failed to break above resistance at the 20-day moving
average, while the S&P 500 closed smack on the line, leaving it
with a narrow trading range bounded by the 20-day and 50-day moving
averages. The bulls would like to have seen a close above
resistance, but turning as it did from a major support mark, the
bulls have managed to at least turn the tide from down to neutral
and can live to fight another day. So the case for the bulls has
become technically stronger, especially in the longer term because
of yesterday's "test" of a major support zone.
And here is another point for the bulls: In just five days, our
internal indicators (MACD, stochastics, momentum and RSI) have all
fallen from overbought to neutral. However, the sentiment numbers
still favor the bears, but since sentiment reports lag the market
action by about a week, if there is an improvement we won't see it
until late next week.
But even with yesterday's rally, there is a solid strike against
a major upside breakout and it is this: The stock market is very
susceptible to news, and that equates to a lack of conviction on
the part of both buyers and sellers. This leaves the daily moves in
the hands of traders who bounce the indices from support to
resistance in days, resulting in extended periods of range-bound
trading. If the pattern continues, a solid move in either direction
could be postponed until next year.
For one stock to buy now, see the
Trade of the Day
Today's Trading Landscape
To see a list of the companies reporting earnings today,
For a list of this week's economic reports due out,
If you have questions or comments for Sam Collins, please
e-mail him at