Dow Retakes 15,000 as Stocks Move Higher at Week's End
"Overall, the market was relatively mixed today, with most
sectors showing very modest gains," observed Schaeffer's Senior
Equity Analyst Joe Bell, CMT. "There was very little economic data
out, but new home sales did disappoint this morning, which
definitely weighed on the homebuilding sector. We also had a few
retailers report earnings, with mixed results." Against this
Dow Jones Industrial Average (DJI)
stayed in positive territory, and retook its perch above the 15,000
Continue reading for more on today's market, including :
- Schaeffer's Senior Trading Analyst Bryan Sapp warns of a potential "bear trap," and shares his bullish outlook on General Motors ( GM ).
- How Microsoft ( MSFT ) options players took the news of CEO Steve Ballmer's impending retirement.
- In case you missed it: What time frame should traders target for covered calls ? Schaeffer's contributor Adam Warner has some words of wisdom.
- Microsoft (
) loses its leader, new home sales take a plunge, and Intel (
) put volume ramps up.
After a brief trek below the breakeven line this morning, the Dow Jones Industrial Average (DJI - 15,010.51) turned on its heels and marched convincingly higher, closing slightly below its intraday peak of 15,025.56. By the time the closing bell sounded, the blue-chip index had gained 46.7 points, or 0.3%, to retake the 15,000 mark. Microsoft ( MSFT ) popped 7.3% higher to pace the 18 advancers, while Cisco Systems ( CSCO ) paced the 10 laggards, losing 0.6% on the day. Both Bank of America ( BAC ) and General Electric (GE) were unchanged. This week, the Dow lost almost 0.5%.
The S&P 500 Index (SPX - 1,663.50) also headed higher following an early morning hiccup, driving 6.5 points, or 0.4%, north by the end of the day, finishing just shy of its 10-day moving average. And on the heels of yesterday afternoon's trading freeze, the Nasdaq Composite (COMP - 3,657.79) continued higher, adding 19.1 points, or 0.5%. On a weekly basis, the SPX gained 0.5%, while the COMP surged 1.5%.
The CBOE Market Volatility Index (VIX - 13.98) subsequently continued lower, giving back 0.8 point, or 5.3%, to close beneath its 10-day moving average after seven sessions above this trendline. The market's fear barometer shed 2.7% on the week.
A Trader's Take :
"Some of the big news on the day was the announcement that Microsoft ( MSFT ) CEO Steve Ballmer will retire within a year," added Bell. "The news actually sent shares of the stock significantly higher, and the tech sector paved the way north for the broad market."
3 Things to Know About Today's Market :
- Sales of new homes dropped 13.4% last month from June, hitting 394,000, the Commerce Department reported today. The number fell well short of economists' estimates, and marked the lowest reading in nine months. (NBC News)
- Steve Ballmer, who has served as Microsoft ( MSFT ) CEO for 13 years, announced his retirement today. Some expected the polarizing leader (only the second in the company's 38-year history) to hold the post until at least 2017, but will step down within the next 12 months. (Chicago Tribune)
- Federal Reserve officials -- absent their leader, Ben Bernanke -- converged on Jackson Hole, Wyo., today for their annual monetary conference. The central-bank leaders were treated to research from two economists, which argued that months' worth of bond-buying efforts may not have had the intended impact on economic growth. (Bloomberg)
5 Stocks We Were Watching Today :
- Range-bound Oracle (ORCL) has been attracting put traders of all types.
- Call buyers descended on Yahoo! Inc. (YHOO) , betting on continued upside over the next few months.
- Our Option Idea of the Week shares why Chesapeake Energy (CHK) could be poised to further explore new-annual-high territory.
- Option bears targeted further downside in Intel Corporation ( INTC ) with a bear put spread.
- In the wake of its quarterly earnings report, Marvell Technology (MRVL) enjoyed several votes of confidence on Wall Street.
For a look at today's options movers and commodities activity, head to page 2.
Crude oil futures advanced, on chatter that worse-than-expected home sales data will delay any tapering action by the Federal Reserve. By the close, October-dated futures were up $1.39, or 1.3%, to settle at $106.42 per barrel. Comparing front-month contracts on a week-over-week basis, black gold slipped 1% from last Friday's close.
Elsewhere, gold futures continued to march up the charts, hitting their highest point since early June. December-dated gold added $25 on the day, or 1.8%, to settle at $1,395.80 an ounce. For the week, the precious metal gained 1.8% as well.