The Dow Jones Industrial Average (DJI) spent most of the session swimming in red ink, thanks to uninspiring blue-chip earnings and a round of lackluster economic data. Most notably, first-time unemployment filings and regional manufacturing activity felt the wrath of Superstorm Sandy, while gross domestic product (GDP) figures from the euro zone only exacerbated concerns about the global economy. Against this backdrop -- and despite a valiant eleventh-hour rebound attempt by the bulls -- stocks ended yet another session south of breakeven.
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The Dow Jones Industrial Average (DJIA) explored a range of more than 100 points today -- most of it in the red -- but found intraday support in the 12,500 region. Despite paring most of its losses by the close, the blue-chip barometer finished 28.5 points, or 0.2%, lower, bringing its losing streak to three straight sessions. The index's components were split in direction, with Cisco Systems' ( CSCO ) 1.6% gain leading the 13 advancing equities, and Wal-Mart Stores ( WMT ) bringing up the rear with an earnings-induced loss of 3.6%. UnitedHealth Group ( UNH ) finished flat.
It was a seesaw session for the S&P 500 Index (SPX) , which gave up 2.2 points, or 0.2%, by the time the dust settled. Meanwhile, the Nasdaq Composite (COMP) also trimmed its deficit in the final hour of trading, but ultimately swallowed a loss of 9.9 points, or 0.4%.
The CBOE Market Volatility Index (VIX) extended yesterday's advance, adding 0.4% after topping out at 18.64.
A Trader's Take
"Let's just call this a 'broken record' market," said Senior Technical Strategist Ryan Detrick. "The bulls tried, but in the end the bears simply beat them down yet again. I wish I had more to say, but there really wasn't anything very new that moved the markets today. We're extremely oversold, yet any and all bounces are still sold."
Looking ahead, "You could argue that we're a day closer to a bottom, which is at least something for the bulls," continued Detrick. "Meanwhile, November-dated options expire tomorrow, so be on your toes, as this can produce some volatile moves in individual stocks."
Economic and Earnings News
Initial jobless claims jumped by 78,000 last week to a seasonally adjusted 439,000, said the Labor Department, rising well beyond the consensus estimate of 375,000. The weekly results included an uptick from Superstorm Sandy amid factory closures and other related interruptions. The four-week moving average of first-time jobless claims rose by 11,750 to 383,750.
The Empire State manufacturing index arrived at negative 5.22 in November -- a modest improvement from its October perch at negative 6.16. This marked the fourth consecutive month of contraction in New York-area factory activity. However, economists had been bracing for an even bleaker reading of negative 8.2.
The Philadelphia Fed's manufacturing index deteriorated to negative 10.7 in November from the previous month's reading of 5.7. The report was far worse than expected, as economists were looking for a reading of 2.0. The central bank attributed the dismal reading, in part, to "the disruptive effects of Hurricane Sandy."
The consumer price index (CPI) rose 0.1% in October, noted the Labor Department, with the inflation rate cooling amid lower gasoline prices. Excluding food and energy prices, the core CPI climbed 0.2% last month. Economists, on average, expected gains of 0.1% in both the headline and core CPI.
Optimism waned during the week ended Nov. 14, according to the latest sentiment survey by the American Association of Individual Investors (AAII). The percentage of respondents with a bullish view on stocks fell to 28.8% from 38.5%, while the percentage bearish surged to 48.8% from 39.9%. The percentage neutral increased to 22.4% from 21.6%.
More Stocks Making News :
- Dow heavyweight Hewlett-Packard ( HPQ ) was slapped with a price-target cut, while data storage provider NetApp ( NTAP ) scored a post-earnings upgrade.
- Online coupon king Groupon (GRPN) named a new Chief Operating Officer.
- Fast-food bigwig McDonald's (MCD) tagged a new high after announcing some leadership changes.
For today's activity in commodities, options, and more, head to page 2.
In the Options Pits
- A settlement with the Department of Justice lured bullish bettors to BP plc (BP) .
- Long-term skeptics scooped up puts on DryShips (DRYS) .
- Traders waxed optimistic on Yahoo! Inc. (YHOO) while calling on limited upside for Apple Inc. (AAPL) .
- One speculator extended a pessimistic position on Verizon Communications (VZ) .
- Investors picked up soon-to-expire puts on CVS Caremark (CVS) .
- Option players were likely disappointed after earnings from Vringo (NYSEAMEX:VRNG) .
Crude futures backpedaled for the third time in four sessions, as lackluster economic data and the latest inventories report weighed on expectations for demand. Domestic stockpiles jumped by 1.09 million to 375.9 million barrels last week, marking a three-month high, as production climbed to an 18-year peak. By the close, December-dated crude shed 87 cents, or 1%, to finish at $85.45 per barrel.
Gold futures also took a tumble, thanks to escalating concerns about ebbing demand. The World Gold Council said that in tonnage terms, global gold demand fell a year-over-year 11% in the third quarter, thanks to a scaled-back appetite in China. In value terms, year-over-year demand dropped 14% to $57.6 billion, while the average price of gold fell 3% to $1,652 an ounce. Against this backdrop, gold for December delivery surrendered $16.30, or 0.9%, to end at $1,713.80 an ounce.
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