Shaking off the weather-related two-day lapse in trading, the Dow Jones Industrial Average (DJI) endured a rather up-and-down session, dipping to a slim loss at the closing bell. "The market opened up without a hitch and trading resumed just fine," noted Schaeffer's Senior Technical Strategist Ryan Detrick. "But while we came out of the gate with higher prices, the market eventually sold off once again. We've noted how price action is rather bearish, while various sentiment indicators are flashing extreme levels of skepticism. This doesn't mean we will bottom and rally, but it does improve the odds of a stellar rally on any good news," said Detrick. "Now, we just need some good news."
The markets see-sawed throughout the session, starting the day with moderate gains as investors enthusiastically returned from a two-day trading break. By lunchtime, however, stocks were in negative territory, only to pop back near breakeven shortly before the close. It was ultimately a mixed and uninspiring finish, as the Dow was just shy of breakeven, the S&P 500 Index (SPX) closed fractionally higher, and the tech-rich Nasdaq Composite (COMP) gave back roughly 0.4%. For the month, the Dow retreated 2.5%, the SPX shed 2%, and the COMP brought up the rear with a 4.5% drop.
The CBOE Market Volatility Index (VIX), meanwhile, rallied sharply on the day and surged 18.2% for the month. The index continues to drift below its 20-month moving average, however, which has contained all but one monthly close since last November.
Today's highlight: "You have to hand it to both Ford (NYSE:F) and General Motors (NYSE:GM), as both soared on some nice earnings. Still, earnings across the board have been rather disappointing," said Detrick.
"Nonetheless, the mergers and acquisitions activity continues to show there are some great values out there. First off, Walt Disney (NYSE:DIS) bought Lucasfilm for more than $4 billion, making George Lucas the second-largest holder of DIS shares." Detrick continued, "Then, PVH Corp. (NYSE:PVH) paid a 38% premium, or $2.9 billion, for Warnaco (NYSE:WRC). Things are scary and the economy continues to weaken, but most of that is factored in. EVERYONE knew this earnings season would be bad. I'm more encouraged by the fact we continue to see M&A activity for some huge premiums."
More of today's big stories:
And, in case you missed it ... Four outperforming credit services names that are poised to charge higher.
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