The Dow Jones Industrial Average (DJI) ended near a session low, as escalating concerns about the fiscal cliff trumped encouraging economic data. Congressional leaders did little to help matters, with Senate Majority Leader Harry Reid (D-Nev.) admitting to "little progress" on Capitol Hill, while Republicans pointed the finger at politicking among Democrats. In addition, traders essentially shrugged off bailout progress across the pond, as well as reports of a record Cyber Monday. Against this backdrop, the S&P 500 Index (SPX) fell to psychological support, while the tech-rich Nasdaq Composite (COMP) snapped its six-session winning streak.
Continue reading for more on today's market events, including :
- In Focus : Our own Bernie Schaeffer stopped by PBS's "Nightly Business Report" to discuss the imploding volatility trade ... and its impact on next year's market outlook.
- Daily Game Plan : Why Senior Trading Analyst Bryan Sapp is expecting a break higher over the next couple of days.
- Chart of the Day : Senior Options Strategist Tony Venosa, CMT, makes a case for buying pullbacks on this stock .
- Everything You Need to Know : Your one-stop shop for levels to watch, economic data, earnings reports, stocks on the move, and commodities action.
The Dow Jones Industrial Average (DJIA) ended on a loss of 89 points, or 0.7%, to surrender its perch atop its 20-day moving average. Boeing ( BA ) led the seven advancing blue chips, adding 0.3%, while Hewlett-Packard ( HPQ ) paved the path lower with a 3% drop.
The S&P 500 Index (SPX) also finished near an intraday nadir, giving up 7.4 points, or 0.5%, to end just shy of the 1,400 level. Meanwhile, despite spending a healthy part of the day in the black, the Nasdaq Composite (COMP) eventually followed suit, shedding 9 points, or 0.3%.
The CBOE Market Volatility Index (VIX) tacked on 2.7%, thanks to an eleventh-hour rebound.
A Trader's Take
"There were slightly better-than-expected durable goods and consumer confidence readings this morning, but they didn't really spark too much interest from traders," said Schaeffer's Senior Equity Analyst Joe Bell. "This morning, we finally got a little good news out of Europe, as the International Monetary Fund and euro-zone finance ministers came to an agreement on Greek financing. The market reaction was mixed, as many participants are going to take a wait-and-see approach regarding this latest plan."
However, "while most broad-market indexes finished the day slightly lower," it wasn't a bleak session all-around. "The utilities and consumer staples sectors outperformed the market, as some participants rushed to safety," he said.
Economic and Earnings News
The S&P/Case-Shiller 20-city home price index improved 0.3% in September, or 0.4% on a seasonally adjusted basis. Year-over-year, the index was up 3% for the month. The data arrived right in line with consensus expectations.
Durable goods orders were flat at a seasonally adjusted $216.95 billion in October, reported the Commerce Department, as strength in machinery orders offset a lackluster showing for autos and planes. The report was stronger than forecast, as economists were bracing for a 1.2% drop.
The Conference Board's consumer confidence index edged up to 73.7 in November, modestly higher than October's upwardly revised reading of 73.1. The report was rosier than expected, as economists predicted a tamer reading of 73.0. The index is now docked at its highest level since February 2008.
More Stocks Making News :
- Facebook ( FB ) enjoyed yet another upbeat analyst note.
- Pfizer ( PFE ) was slapped with a pre-market downgrade.
- Ahead of the fiscal cliff, special dividends were announced by both Las Vegas Sands ( LVS ) and Dillard's (DDS).
- ConAgra Foods (CAG) unveiled a $6.8-billion acquisition.
- Monster Beverage (MNST) rallied amid easing regulatory concerns.
- Time Warner (TWX) jumped to a five-year best.
- ACADIA Pharmaceuticals (ACAD) skyrocketed on favorable drug data.
For today's activity in commodities, options, and more, head to page 2.
In the Options Pits
- Amazon.com (AMZN) attracted option bulls after a record-setting Cyber Monday.
- Pandora Media (P) traders picked up covered calls ahead of earnings.
- Juniper Networks (JNPR) saw a jump in front-month call buying.
- Electronic Arts (EA) calls are picking up steam.
- A Ford Motor (F) fan extended a bullish position.
- Nike (NKE) puts are enjoying a surge in popularity.
- Cisco Systems (CSCO) was swarmed by round-number call players.
- Chesapeake Energy (CHK) speculators are gambling on a rebound.
Oil futures caught an early boost from the Eurogroup's Greek debt accord, but the positive momentum didn't last long. Traders were spooked by reports of a fiscal-cliff gridlock on Capitol Hill, along with a bleak global growth forecast from the Organization for Economic Cooperation and Development (OECD). Crude for January delivery shed 56 cents, or 0.6%, to finish at $87.18 per barrel.
Gold futures continued to backpedal, as a stronger U.S. currency diminished the dollar-denominated commodity's appeal. December-dated gold ended on a drop of $7.30, or 0.4%, at $1,742.30 per ounce.
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