Fiscal-cliff anxiety and muted news on the housing front spurred some selling pressure today, as the Dow Jones Industrial Average (DJI) narrowly avoided a triple-digit loss. "After a strong rally during the past couple of days, a stall in price action wasn't much of a surprise," reasoned Schaeffer's Senior Equity Analyst Joe Bell.
Continue reading for more on today's market, including:
The Dow Jones Industrial Average (DJIA) spent most of the day south of breakeven, with selling accelerating in the latter half of the afternoon. The blue-chip index closed with a loss of 99 points (0.7%), and finished a fraction off its intraday low but solidly above its 10-day moving average. Just three of the index's 30 names finished higher on the day, led by United Technologies (NYSE:UTX), which gained 1%. At the back of the pack was General Electric (NYSE:GE), down 3.1% amid buzz that the conglomerate plans to purchase Italian aerospace concern Avio for an estimated $4 billion.
Finishing one penny off its intraday nadir, the S&P 500 Index (SPX) gave back 11 points, or 0.8%. Elsewhere, the Nasdaq Composite (COMP) dropped 10 points, or 0.3%, settling at its intraday low.
As its December options expired, the CBOE Market Volatility Index (VIX) powered higher, closing up 11.5%, or 1.8 points.
A Trader's Take:
"There weren't many earnings reports to digest today," Bell observed, "but Oracle (NASDAQ:ORCL) reacted well to its better-than-expected results, and the tech sector held its own after underperforming the past several weeks." Bell added, "I continue to be impressed with the housing sector. After mixed data this morning, several participants sold their homebuilding stocks, but the selloff didn't last long. Many of the names churned higher throughout the day and finished near their highs. This has been a very resilient sector during 2012," Bell asserted, "and continues to prove the doubters wrong."
3 Things to Know About Today's Market:
Plus ... a McDonald's (NYSE:MCD) worker in Wales -- who was reportedly heavy-handed with the McFlurry chocolate sprinkles -- was handed a pink slip for "stealing food." The 19-year-old employee cried unfair dismissal, and settled out of court for more than 3,000 pounds (roughly $4,900), which amounts to nearly 17 weeks' pay.
Today's Top Tweet:
"Steven Wright once had a whole show that was shorter than [House Speaker John] Boehner's speech. 'In England, do they call Miles Davis "Kilometers" Davis'"
@agwarner, 2:22 p.m.
5 Stocks We Were Watching Today:
Question of the Day:
Q: What happens to the put holders and sellers when a company files for bankruptcy?
A: If you bought a put contract on a company that declares bankruptcy, you're in luck -- you can still profit from your short position, even if trading is halted on the stock. That's because the delivery and settlement of stock options is guaranteed in the U.S. by the Options Clearing Corporation (OCC). Although opening transactions will no longer be allowed, you can still sell to close your put option for cash.
A put seller will still have the obligation to deliver shares of the security, if they're available via Pink Sheets. If a bankruptcy court rules the company's stock certificates are null and void -- and the share price drops to zero -- put options can only be settled for cash, or the difference between the original strike price of the option and the stock price.
For a look at today's options movers and commodities activity, head to page 2.
The Case for Big Moves in IWM and QQQ
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