The Dow Jones Industrial Average (DJI) got off to a rough start, and early signs pointed to another dismal day on Wall Street. However, indications of actual bipartisanship in Washington, D.C., lured a few buyers from the sidelines, with congressional leaders calling "fiscal cliff" talks with the president "constructive." With hope seemingly on the horizon, the major market indexes turned higher, snapping their losing streaks.
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The Dow Jones Industrial Average (DJIA) was down about 70 points at its intraday nadir, but rebounded to notch a 45.9-point, or 0.4%, gain and end its four-day retreat. Twenty-two of the Dow's 30 components ended higher, led by Alcoa's (NYSE:AA) 1.6% gain. Meanwhile, Hewlett-Packard (NYSE:HPQ) paced the eight declining equities, shedding 1.8%. For the week, the Dow gave up 1.8%, but maintained a perch atop its 80-week trendline.
Likewise, the S&P 500 Index (SPX) clawed its way out of the red, adding 6.6 points, or 0.5%. The Nasdaq Composite (COMP) followed suit, tacking on 16.2 points, or 0.6%, after spending the first half of the session south of breakeven. For the week, the SPX and COMP gave up 1.5% and 1.8%, respectively.
The CBOE Market Volatility Index (VIX) dropped 1.6 points, or 8.8%, but found a foothold atop its 10-week moving average.
A Trader's Take
"In the end, it was a lot of volatility, but nothing really happened," said Senior Technical Strategist Ryan Detrick. "Still, we did finish green, which is a nice change given the recent performance. There wasn't a lot of news out there, but I am very encouraged by the recent investor sentiment polls. We are seeing fear spike up to levels last seen at the June lows. Now, of course, this doesn't mean we bottom right here and now, but having a lot of fear is one necessity for a major bottom, and we are seeing that now."
Looking ahead to next week, "I'm sure we'll have more rumors about the fiscal cliff and Europe to drive the daily action," he continued. "Then, considering volume will be very light during a holiday week, there is always the chance that we could have another volatile week coming up."
Economic and Earnings News
Industrial production declined by 0.4% in October, said the Federal Reserve, as Superstorm Sandy shaved about one percentage point from monthly U.S. output. Capacity utilization contracted to 77.8% from 78.2%. Consensus estimates were pegged considerably higher, as economists were looking for production to rise 0.2% on 78.3% utilization.
More Stocks Making News:
For today's activity in commodities, options, and more, head to page 2.
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