Dow Sets New High but Closes Lower, as Fed Stays Mum on Stimulus Plans
"Today was all about the Fed, but after the announcement and a
lot of intraday volatility, we really didn't experience much net
movement," said Schaeffer's Senior Equity Analyst Joe Bell, CMT.
"The statement didn't really give us any surprises, and there
wasn't a strong hawkish tone, so many people viewed that as
positive." Meanwhile, the
Dow Jones Industrial Average (DJI)
claimed yet another new technical milestone, but ended up finishing
the session slightly in the red.
Continue reading for more on today's market, including :
- Schaeffer's Senior Trading Analyst Bryan Sapp notes that sentiment is mixed heading into the next few days, which " creates the potential for big volatility ."
- Front-month optimists predicted new multi-year highs for financial titan Bank of America ( BAC ).
- Uptrending Ford ( F ) saw a spike in weekly put volume , marking a change of pace for the auto giant.
- The private sector added new jobs in July, MasterCard (
) reported stronger-than-expected quarterly earnings, and Alcatel
) basked in the bullish analyst limelight.
The Dow Jones Industrial Average (DJI - 15,499.54) rallied to a new record intraday peak of 15,634.32 during the morning hours of trading, but ended the day with a loss of 21.1 points, or 0.1%. UnitedHealth ( UNH ) led the 12 advancing blue-chip components with a gain of 0.8%, while the 17 laggards were paced by American Express (AXP) and Verizon Communications (VZ), both of which posted a decline of 1.9%. United Technologies (UTX) remained unchanged. For the month, the Dow logged an advance of 4%.
The S&P 500 Index (SPX - 1,685.73) came within a hair's breadth of its all-time intraday high this afternoon, but shed 0.2 point, or 0.01%, by the closing bell. On a more upbeat note, the Nasdaq Composite (COMP - 3,626.37) hit a 12-year high of 3,649.35 before finishing the session with a rise of 9.9 points, or 0.3%. The indexes closed the month of June with gains of 4.9% and 6.6%, respectively.
The CBOE Market Volatility Index (VIX - 13.45) also ended higher, despite sinking to an intraday low of 12.94. The "fear gauge" edged up 0.1 point, or 0.5%, for the day, but was down 20.2% for the month.
A Trader's Take :
"Disregarding the Fed announcement, we actually saw some pretty big economic reports this morning," commented Bell. "Gross domestic product (GDP) growth and the ADP jobs report were both stronger than expected, showing signs that perhaps the economy is on slightly better footing than most have given it credit for."
3 Things to Know About Today's Market :
- Automatic Data Processing (ADP) said the private sector added 200,000 jobs in July , exceeding the consensus view. Meanwhile, June's figure was upwardly revised to 198,000. (MarketWatch)
- The Commerce Department reported that second-quarter gross domestic product (GDP) increased at an annual rate of 1.7%. This figure surpassed the first-quarter's downwardly revised growth rate of 1.1%. (CNBC)
- MasterCard ( MA ) revealed a second-quarter profit of $848 million, or $6.96 per share, up from $700 million, or $5.55 per share, in the year-ago period. Meanwhile, revenue climbed 15% to $2.1 billion. Analysts were expecting earnings of just $6.30 per share on sales of $2.0 billion. (Reuters)
5 Stocks We Were Watching Today :
- Alcatel Lucent ( ALU ) scored a round of upbeat brokerage notes on the heels of yesterday's well-received quarterly earnings report.
- Skepticism has been growing toward Amazon.com (AMZN) lately, despite the stock's positive price action.
- A new technical milestone attracted bullish speculators to Facebook's (FB) October series of calls.
- Traders from both sides of the options fence targeted Herbalife (HLF) after the stock touched a fresh 12-month high.
- Analysts at Barclays initiated some optimistic post-earnings coverage of Sirius XM Radio (SIRI) .
For a look at today's options movers and commodities activity, head to page 2.
Crude oil futures closed higher today, boosted by a pair of upbeat economic reports, as well as the Fed's vagueness regarding the future of its current stimulus program. By the time the dust settled, September-dated crude added $1.95, or 1.9%, to end at $105.03 per barrel. Comparing the most active contracts on a month-over-month basis, oil notched a gain of 8.8%.
Conversely, gold finished lower for the fifth time in seven days, as the malleable metal was dragged south by the aforementioned economic data. The December contract lopped off $11.80, or 0.9%, to close at $1,313 an ounce. For the month, however, gold futures surged 7.3%, when comparing the most active contracts.