After a few brief trips into the red, the Dow Jones Industrial Average (DJI) spent the day in positive territory, finishing almost 44 points higher. "Markets have been quite resilient and managed to churn higher today throughout the session, finishing near their intraday peak," observed Schaeffer's Senior Equity Analyst Joe Bell.
Continue reading for more on today's market, including :
- Tips for trading a potential gold rally , from Senior Options Strategist Tony Venosa, CMT.
- How Alcoa ( AA ) option traders are speculating ahead of earnings.
- Are VIX calls a buy? Schaeffer's contributor Adam Warner weighs the pros and cons.
- The latest employment figures, Sprint Nextel ( S ) bulls reach for the stars, and some heavy-handed skepticism in our Tweet of the day.
The Dow Jones Industrial Average (DJI) enjoyed modest gains today, rising 43.9 points, or 0.3%. Gains were fairly broad, as 23 of the index's components were higher, led by Alcoa ( AA ), which rose 2.1%. While Hewlett-Packard ( HPQ ) closed unchanged, Microsoft ( MSFT ) was the worst performer on the day, down 1.9%. For the week, the Dow closed up 3.8%.
The S&P 500 Index (SPX) moved up 7.1 points, or 0.5%, on Friday, while the Nasdaq Composite (COMP) was little changed, up 1 point, or 0.04%. On a weekly basis, the SPX rose 4.6% and the COMP tacked on 4.8%.
The CBOE Market Volatility Index (VIX) continued its dramatic backslide, giving back 5%, or 0.7 point. For the week, the index suffered a whopping 39.1% drop.
A Trader's Take :
"The day got off to a good start with the solid nonfarm payrolls report. Financial stocks had a nice day, while technology issues were among the weaker-performing sectors," Bell observed. "Overall, though, investors still seem to be taking a little rest after the big run up earlier in the week," he added.
3 Things to Know About Today's Market :
- Nonfarm payrolls numbers for December rose by a seasonally adjusted 155,000, which narrowly exceeded economists' expectations. The unemployment rate held at 7.8%, after November's reading was revised a notch higher from the originally reported 7.7%. In other economic news, factory orders were unchanged in November from the previous month, falling short of estimates for a slight rise of 0.1%.
- Congress approved a $9.7 billion aid package for victims of Superstorm Sandy, which will go toward pending flood insurance claims. This is merely the tip of the proverbial iceberg for federal aid, however, as the House will vote on Jan. 15 on an additional $51 billion in relief. Amid the fiscal-cliff crisis, this vote had been postponed by House Speaker John Boehner, R-Ohio (spurring great criticism from Northeast politicians).
- General Motors ( GM ) is recalling 69,000 vehicles from across the globe, as several of its models -- including the Cadillac Escalade and Silverado pickup truck -- may have steering-column problems that could cause the vehicles to roll away. All of the models involved are from 2013, and many were not even sold yet. GM officials expect only a very small number of vehicles actually contained the defect.
Plus ... Dave Mustaine -- the outspoken frontman for '80s metal band Megadeth -- took to the Internet to log a passionate complaint against men's apparel retailer Men's Wearhouse (MW). Mustaine claims to have ordered a gift card for his tour manager that had not been delivered more than a week later, despite promises for two-day delivery. Included in the musician's rant on the retailer's Facebook page was the promise that "I for one, will never set foot in a Men's Wearhouse, even for a shelter from a blizzard ... I absolutely GUARANTEE it," he added, poking fun at the chain's catchphrase.
Today's Top Tweet :
"So consumers were holding back spending coz of fiscal cliff? I have a better chance of cameo on #kardashians than that being true"
@TFMkts, (TF Market Advisors), 6:00 p.m. (1/3/13)
5 Stocks We Were Watching Today :
- Microsoft ( MSFT ) -- which is little changed over the last 52 weeks -- was reduced to a "hold" rating at Argus this morning.
- Sprint Nextel ( S ) bulls are betting on a break to new historical highs.
- Under Armour (UA) was targeted by short-term bearish traders.
- Delta Air Lines (DAL) speculators expect a pullback in the next few weeks.
- Pandora Media (P) traders bought short-term puts.
Question of the Day :
Q : What are the "Dogs of the Dow" for 2013?
A : In yesterday's Market Recap , we defined what the "Dogs of the Dow" theory is. So what stocks make up the 2013 list? The 10 stocks with the highest dividend yields in the Dow Jones Industrial Average, at the close of 2012, were as follows: AT&T (T), Verizon Communications (VZ), Intel (INTC), Merck (MRK), Pfizer (PFE), DuPont (DD), Hewlett-Packard ( HPQ ), General Electric (GE), McDonald's (MCD), and Johnson & Johnson (JNJ). As to whether this strategy works, the jury is still out .
For a look at today's options movers and commodities activity, head to page 2.
Oil futures for February rose 17 cents, or 0.2%, to end at $93.09 per barrel. Gold futures, on the other hand, moved sharply lower, surrendering $25.70, or 1.5%, to close at $1,648.90 per ounce. For the week, oil gained 2.5% while gold lost 0.4%.
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