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Stocks Manage Solid Gains Despite Trading Glitch

Posted
8/22/2013 4:19:00 PM
By: Schaeffer's Investment Research
Referenced Stocks:AEO;HPQ;JCP;LDK;MSFT

"Another wild session," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "The story of the day was the Nasdaq being closed for most of the afternoon. This is yet another computer mistake that does little to help the average investor have any confidence in the stock market. Still, after a six-day losing streak for the Dow Jones Industrial Average (DJI) , it was very nice to see a bounce. The big question is, can it stick?" Despite the aforementioned outage, all three of the major indexes notched respectable gains.

Continue reading for more on today's market, including :

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The Dow Jones Industrial Average (DJI - 14,963.74) spent the entire session in positive territory courtesy of some encouraging economic data, and touched an intraday high of 14,989.12 in the final hour of trading. By the closing bell, the blue-chip barometer was up 66.2 points, or 0.4%, effectively ending its six-day losing streak. Microsoft's ( MSFT ) 2.5% gain led the 24 advancers, while Hewlett-Packard's ( HPQ ) earnings-induced drop of 12.5% paced the six laggards.

The S&P 500 Index (SPX - 1,656.96) notched a full day in the black, as well, and finished 14.2 points, or 0.9%, higher. Meanwhile, despite a trading cessation of more than three hours, the Nasdaq Composite (COMP - 3,638.71) climbed 38.9 points, or 1.1%.

Conversely, the CBOE Market Volatility Index (VIX - 14.76) fell south right out of the gate and stayed there, losing 1.2 points, or 7.4%, on the day.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"In the end, the bulls came back nicely," Detrick continued. "Banks and small caps led the way, which is always a good sign. Sentiment has gotten very cautious if you look at some of the recent sentiment polls. September is historically a weak month, but it is actually up on average over the past 10 years. Things will probably be slow for the rest of August, and then the big traders will come back. Stay tuned."

3 Things to Know About Today's Market :

5 Stocks We Were Watching Today :

  1. Microsoft ( MSFT ) received an upgrade at Nomura, despite the stock's lackluster year-over-year price action.
  2. Disappointing earnings from American Eagle Outfitters ( AEO ) prompted a slew of brokerage firms to lower their price targets.
  3. Call buyers ignored J.C. Penney's ( JCP ) latest investor-related headlines, and bet on a rebound by week's end.
  4. Speculators remained bearish toward Bank of America (BAC) by predicting a downturn ahead of January expiration.
  5. DreamWorks Animation's (DWA) new multi-year high lured September and October option bulls to the trading table.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Crude oil futures finished in the black today, thanks to some promising manufacturing data out of China. By the time the dust settled, October-dated oil gained $1.18, or 1.1%, to close at $105.03 per barrel.

Meanwhile, the same overseas news pushed gold futures higher, although gains were modest due to strength in the greenback. The December-dated contract tacked on 70 cents, or less than 0.1%, to end at $1,370.80 an ounce.

SCHAEFFER'S MARKET POSTURE