With the Fed in Focus, Dow Secures Triple-Digit Gain

Unrest in Libya pushes crude futures higher

by 12/16/2013 4:23:05 PM
Stocks quoted in this article:

"After a pretty lackluster start to the month of December, the major indexes picked up some momentum early today, and small-cap stocks led the way," observed Schaeffer's Senior Equity Analyst Joe Bell, CMT. "There wasn't a whole lot of big news out this morning, but many participants continue to keep an eye on whether the Senate will pass the new budget deal." As Wall Street awaits this week's Federal Open Market Committee (FOMC) meeting -- and amid a mixed bag of economic reports -- the Dow Jones Industrial Average (DJI) finished the day with a triple-digit advance.

Continue reading for more on today's market, including:

  • Find out which three well-known stocks could move on earnings news this week.
  • Is Adobe Systems Incorporated (NASDAQ:ADBE) already fading from earnings glory? Today's traders seem to think so.
  • Bullish speculators predicted a strong start to 2014 for Bank of America Corp (NYSE:BAC).
  • Plus ... the Empire State's general business conditions index gained ground this month, U.S. productivity grew at a notable pace in the third quarter, and Facebook Inc (NASDAQ:FB) received a bullish brokerage note.
Trading Tip of the Day: DO target smaller stocks with the potential for big gains. It's easy to get caught up in the excitement surrounding big-name, high-dollar stocks like Apple Inc. (NASDAQ:AAPL). Remember, though -- a small-cap stock trading at $10 per share needs to rise only 10 points to double in value.

The Dow Jones Industrial Average (DJI - 15,884.57) surged right out of the gate, tagging an intraday high of 15,930.31 within the first 30 minutes of trading. By the end, the blue-chip index was up 129.2 points, or 0.8%. The Dow's 26 advancers were led by International Business Machines Corp. (NYSE:IBM) -- which gained 2.9% -- while a 0.8% drop for The Procter & Gamble Company (NYSE:PG) paced the three decliners. Pfizer Inc. (NYSE:PFE) remained unchanged.

The S&P 500 Index (SPX - 1,786.54) also spiked higher at the sound of the opening bell, and finished 11.2 points, or 0.6%, higher. Meanwhile, the Nasdaq Composite (COMP - 4,029.52) added 28.5 points, or 0.7%, for the session.

Elsewhere, the CBOE Volatility Index (VIX - 16.03) faltered early in the session, but gained traction throughout the day to close 0.3 point, or 1.7%, higher.

CLOSING SUMMARY  INDICES

CLOSING SUMMARY  NYSE AND NASDAQ

A Trader's Take:

"With a lot of people attributing the past two weeks to profit taking, perhaps we have set the stage for a Santa Claus rally once again," opined Bell. "Historically, the last couple of weeks in December have been incredibly strong, and the nice bounce today could be the start of that trend once again."

3 Things to Know About Today's Market:

  • The Empire State's general business conditions index arrived at 1.0 in December, up from last month's reading of negative 2.2. However, the latest figure was still below the consensus view. (MarketWatch)
  • The Labor Department said nonfarm labor productivity grew at a yearly pace of 3% in the third quarter, marking the quickest rate since 2009's fourth quarter. Initial reports had shown an increase of just 1.9%. (The Wall Street Journal, login required)
  • Industrial production climbed by 0.6% in November, according to the Fed, compared to the previous month's gain of 0.5%. Meanwhile, capacity utilization surged to 76.8%, notching a near-six-year high. (Reuters)

5 Stocks We Were Watching Today:

  1. Outperforming Facebook Inc (NASDAQ:FB) received a vote of confidence at Topeka Capital ahead of this morning's opening bell.
  2. Traders have been placing bullish bets on EMC Corporation (NYSE:EMC) lately, with a notable focus on the stock's front-month calls.
  3. Delta Air Lines, Inc. (NYSE:DAL) saw a jump in call volume, but some of these "bulls" may have been short sellers hedging their bearish bets.
  4. A guidance-induced high for Las Vegas Sands Corp. (NYSE:LVS) triggered a flurry of bullish betting, as speculators bought December calls.
  5. Intel Corporation (NASDAQ:INTC) attracted both call buyers and sellers to the options pits, following this morning's M&A announcement.
  6. For a look at today's options movers and commodities activity, head to page 2.

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