"As poor as today's economic data was, the good news was we saw some solid earnings," said Schaeffer's Senior Technical Strategist Ryan Detrick, CMT, of a day where the Dow Jones Industrial Average (DJI) bounced around breakeven for much of the day, notched (another) new all-time high, and settled 42 points lower. "Earnings season is pretty much officially over after tomorrow, though, so it was nice to see some strength near the end of it."
Continue reading for more on today's market, including :
- Schaeffer's Senior Trading Analyst Bryan Sapp points out where to "buy on weakness" in the short term.
- Facebook Inc ( FB ) attracted a crop of call buyers, who expect a move above $30 in the next month.
- Why isn't the CBOE Market Volatility Index (VIX) moving ? Schaeffer's contributor Adam Warner has five theories.
- A surprise pop in jobless claims, a new boss at the IRS, and a burst of strength in the shipping sector.
Although the Dow Jones Industrial Average (DJI) , settled on a loss of 42.5 points, or 0.3%, at 15,233.22, the day wasn't a total loss. In fact, the blue-chip index hit another new all-time high of 15,302.49 in late-morning trading. Just seven Dow components closed in positive territory, powered by Cisco Systems ( CSCO ), which rallied 12.6% after its earnings report. Walt Disney ( DIS ) and Wal-Mart Stores ( WMT ), meanwhile, were the day's laggards, shedding 1.8% and 1.7%, respectively. Alcoa ( AA ) closed unchanged on the day.
The S&P 500 Index (SPX) declined as well, losing 8.3 points, or 0.5%, to close atop round-number support at the 1,650.47 mark. After reaching a new 12-year peak of 3,485.95, the Nasdaq Composite (COMP) succumbed to late-session selling pressure, dropping 6.4 points, or 0.2%, to close at 3,465.24.
The CBOE Market Volatility Index (VIX) muscled back above the 13 level (and its 10-day trendline). At the close, the VIX was up 0.3 point, or 2%, at 13.07, its first close north of 13 since May 9.
A Trader's Take :
"The economic data was rather weak, "summarized Detrick. "From jobs data, to housing starts, to the Philly Fed's manufacturing data, all disappointed. Considering the recent run higher and the chance traders were given to bail on 'bad' news today, though, the price action was (for the most part) encouraging. Markets held tough until a late-day dip."
3 Things to Know About Today's Market :
- The Consumer Price Index (CPI) posted its biggest drop since December 2008, declining 0.4% in April to fall short of economists' estimates for a 0.2% pullback. Elsewhere, weekly jobless claims rose by 32,000 -- the largest jump since November -- to a seasonally adjusted 360,000. Economists had projected a narrower increase in the figure. (Chicago Tribune, FOX Business)
- Acting on his pledge to appoint fresh leadership to the Internal Revenue Service, President Barack Obama tapped senior White House budget officer Daniel Werfel to serve as acting commissioner of the agency. Werfel, who has experience under the George W. Bush and Obama administrations, replaces Steven Miller, who was summarily released from the position yesterday. (The Washington Post)
- Cisco Systems ( CSCO ) gained more than 12% and notched a new 52-week high following its positive earnings surprise . In the fiscal third quarter, Cisco earned 51 cents per share (excluding items), topping estimates by two pennies. Revenue was roughly in line with analysts' expectations. (USA Today)
5 Stocks We Were Watching Today :
- Bulls of all kinds have been betting big on American International Group (AIG).
- Nokia Corporation (NOK) put sellers wagered on long-term support .
- Our Weekly Contrarian : Procter & Gamble (PG) could have further upside ahead.
- Shipping concerns Eagle Bulk Shipping (EGLE) and DryShips Inc. (DRYS) saw a flood of speculative activity as both rallied sharply.
- Amazon.com (AMZN) scored a new "buy" rating at Lazard this morning.
For a look at today's options movers and commodities activity, head to page 2.
Crude futures elbowed their way to a modest gain on Thursday, supported by weakness in the U.S. dollar. June-dated oil added 86 cents, or 0.9%, to end the day at $95.16 per barrel.
Tame inflation data kept gold futures under pressure, sending the precious metal to its sixth straight daily loss. Gold for June delivery lost $9.30, or 0.7%, to finish at $1,386.90 per ounce -- its lowest daily close since April 17.
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