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Lackluster Domestic Data Augments Weekly Losses, But Can't Halt Third-Quarter Rise
By: Schaeffer's Investment Research
"Today was the final day of the third quarter, and we ended the
session on a negative note," said Schaeffer's Senior Equities
Analyst Joe Bell. "The market was weak early on, and the
worse-than-expected Chicago purchasing managers index (PMI) didn't
help, as the reading was at its lowest level in three years." Even
though the day was a loss, the
Dow Jones Industrial Average (DJI)
was able to maintain a considerable gain for the month and quarter.
Keep reading to see what else was on our radar today:
- Shore up your portfolio during these trying times with 8 proven tips from the Schaeffer's trading team .
- What do the replacement refs and reverse economic stimulus have in common?
- And, puts-a-plenty on Facebook Inc ( FB ) , Starbucks Corporation ( SBUX ) , and SodaStream International Ltd ( SODA ) .
The Dow Jones Industrial Average (DJI - 13,437.13) was off more than 118 points at its session bottom of 13,367.27, but reclaimed a large portion of this deficit by the time the closing bell sounded. The blue-chip barometer racked up a daily loss of 48.8 points, or 0.4%. All but five of its 30 components finished below breakeven today, with Intel Corporation's ( INTC ) 1.9% fall leading the way. Cisco Systems ( CSCO ), meanwhile, paced the five winning issues with a 1.6% uptick. The Dow buckled more than 1% on the week, but enjoyed a 2.6% rally during September. For the third quarter, the index surged 4.3%.
The S&P 500 Index (SPX - 1,440.67) and Nasdaq Composite (COMP - 3,116.23) stayed in the red as well, retreating back below their 20-day moving averages. The SPX gave back 6.5 points, or roughly 0.5%, while the COMP edged 20.4 points, or 0.7%, lower. The broad-market SPX sawed off 1.3% for the week, but jumped 2.4% for the month. Its third-quarter return arrived at 5.8%. For the week, the tech-rich COMP declined 2%, but tacked on 1.6% in September. Its quarterly total arrived at a gain of 6.2%, which is the best of its fellow benchmarks.
The CBOE Market Volatility Index (VIX - 15.73) battled its way back atop the 15 mark, adding 0.9 point, or 6%. The market's fear gauge lifted 12.5% on the week, but saw a monthly loss of nearly 10%. For the third quarter, the VIX was down 7.9%.
Today's highlight : "Despite the early weakness and terrible Chicago PMI, the results of Spain's bank stress tests were revealed and generally well received," noted Bell. "With the shortfall within the expected range, many participants reacted positively and the market finished well off its lows."
Turning to today's major market stories...
- Get expert advice on how to to protect your portfolio using options.
- Highs & Lows : Walgreen Company (WAG) ignored its lackluster earnings report and jumped to a new high.
- A couple of bear put spreads were ordered up on Starbucks Corporation ( SBUX ) and Transocean LTD (RIG) .
- Analysts adjusted their positions on Dow giants McDonald's Corporation (MCD) and General Electric Company (GE) .
- Regular Schaeffer's contributor Adam Warner analyzed the "reverse economic stimulus program" implement by the NFL's replacement-ref experiment.
- Put buyers took a big drink of SodaStream International Ltd ( SODA ) , while put writers looked to Facebook Inc ( FB ) for a play.
- Option Volume Briefs : Small-Cap Bears Expect Big Downside.
For today's activity in commodities, options, and more, head to page 2.
Crude futures saw gains for a second consecutive session, as stress-tests results in Spain helped quell investor anxieties. By the close, November-dated oil added 34 cents, or 0.4%, landing at $92.19 a barrel. This pared the commodity's weekly deficit to near 0.8%. Black gold ripped off 4.4% for September, but gained 8.5% in the third quarter.
Gold futures took a breather today, following a seven-month best in yesterday's session . December-dated gold ended $6.60, or 0.4%, lower to settle at $1,773.90 an ounce for the day, and inched 0.2% lower for the week. The malleable metal rose 5.1% in September, and notched an impressive 10.6% gain for the quarter -- this marked the biggest increase for gold since the April-June period in 2010.
Levels to watch in trading...
Dow Jones Industrial Average (DJI - 13,437.13)
- support at 11,500; resistance at 14,000
S&P 500 Index (SPX - 1,440.67)
- support at 1,100; resistance at 1,500
- Nasdaq Composite (COMP - 3,116.23) - support at 2,400; resistance at 3,400
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.