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Dow Bounces Back on Election Eve
By: Schaeffer's Investment Research
Dow Jones Industrial Average (DJI)
proved resilient today, bouncing back from an initial retreat to
settle modestly higher. "The Institute for Supply Management's
(ISM) services index for October came in slightly under
expectations, but that didn't affect the market all that much, with
stocks shaking off early losses to finish north of breakeven," said
Schaeffer's Senior Equity Analyst Joe Bell. "Technology and basic
materials stocks were among the top-performing sectors, and we also
had a few earnings reports here and there. Mostly, though,
participants are simply looking ahead to the big election
Daily Game Plan : Schaeffer's Senior Trading Analyst Bryan Sapp weighs in on what appears to be a pre-election holding pattern .
And now, a look at the numbers...
Stocks started off on the wrong foot today, but the bulls won the coin toss in the final hour of trading. By the close, the Dow had added 19.3 points, or 0.2%, to end just a hair's breadth south of its 10-day moving average.
The S&P 500 Index (SPX) also battled back in afternoon action, tacking on 3 points, or 0.2%, while the Nasdaq Composite (COMP) advanced 17 points, or 0.6%, before halting just shy of the 3,000 mark.
The CBOE Market Volatility Index (VIX) extended Friday's advance, gaining 4% to finish north of its 200-day moving average.
Today's highlight : "The wait is practically over and the highly anticipated election is here," said Bell. "By tomorrow night, we should know who our next President will be. Political signs can be removed from yards, and campaign commercials can stop. That will make me a very happy man."
More of today's big stories:
- Schaeffer's contributor and overall trouper Adam Warner offered a first-hand account of life after Sandy .
- Airlines were in the news, after Boeing Company's ( BA ) first Dreamliner 787 took to the skies , and JetBlue Airways ( JBLU ) warned of a Sandy-related hit to earnings .
- Amazon.com ( AMZN ) and Starbucks ( SBUX ) scored pre-market price-target hikes , while NVIDIA (NVDA) was hit with a negative analyst note .
- Pre-earnings option traders gambled on the fate of Groupon (GRPN) .
- Both bulls and bears flocked to Facebook's (FB) weekly options .
- Call players circled uptrending Transocean Ltd. (RIG) , while put players pounced on TiVo (TIVO) .
- Most Active Options Update : Yahoo! (YHOO), American International Group (AIG), and Bank of America (BAC)
And, in case you missed it ... Our own Bernie Schaeffer weighs in on the love affair with Treasury bonds .
For today's activity in commodities, options, and more, head to page 2.
Crude futures finished a wishy-washy session in the black today. With Hurricane Sandy -- and the majority of its power outages -- in the rearview mirror, expectations for demand were on the rise, which helped to overshadow a stronger greenback. However, uncertainty ahead of tomorrow's election kept black gold relatively range-bound. By the time the dust settled, crude for December delivery tacked on 79 cents, or 0.9%*, to finish at $85.65 per barrel.
Gold futures bounced back today, as traders sought safety ahead of the highly anticipated presidential election. Furthermore, bargain hunting likely contributed to the malleable metal's rebound, after the front-month contract touched a two-month low on Friday. Despite a strengthening dollar, December-dated gold added $8, or 0.5%, to end at $1,683.20 an ounce.
Levels to watch in trading...
Dow Jones Industrial Average (DJI - 13,112.44)
- support at 11,500; resistance at 14,000
S&P 500 Index (SPX - 1,417.26)
- support at 1,100; resistance at 1,500
- Nasdaq Composite (COMP - 2,999.66) - support at 2,400; resistance at 3,400
*Editorial note: An earlier version was updated to reflect the correct percentage changes for oil and gold. No other numbers were impacted.
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.