Stocks wavered today, with the major market indexes spending time on both sides of the breakeven line. The U.S. dollar continued to exert its influence, with the buck bouncing back from early weakness to extend Monday's gains. Demand for the greenback was reignited after the Conference Board's index of consumer confidence fell to 47.7 this month, down from 53.4 in September. Analysts were expecting a much smaller pullback, and the downbeat number dampened investors' appetite for risk. (As a silver lining, the Treasury drew the highest demand in two years for its auction of two-year notes.) Meanwhile, traders also eyed cautious comments from heavyweight fund manager Bill Gross, who asserted, "The six-month rally in risk assets... is likely at its pinnacle." With demand rising for safe-haven investments, the comparatively more speculative Nasdaq Composite (COMP) suffered the brunt of the selling pressure in today's mixed session.
Despite a few dips into the red, the Dow Jones Industrial Average (DJIA 9,882.17) managed to claw its way to a 14.2-point gain, up 0.1% for the session. American Express (AXP) and Exxon Mobil (XOM) blazed a path higher for the 15 advancing blue chips, while Alcoa (AA) and Walt Disney (DIS) paced the 15 decliners. Today's modest gain was more than sufficient to keep the Dow above support at its 20-day moving average, though its 10-day trendline looms overhead in the 10,000 region.
The S&P 500 Index (SPX 1,063.41) didn't fare as well, spending most of the afternoon mired in negative territory. The SPX finished on a modest dip of 3.5 points, or 0.3%, to notch a second consecutive close south of its 20-day trendline. As for the Nasdaq Composite (COMP 2,116.09), the tech-heavy index surrendered its grip on positive ground early in the day, and finally swallowed a loss of 25.8 points, or 1.2%. As a result, the COMP settled beneath its 20-day moving average for the first time in three weeks.
Turning to equities in focus, Patriot Coal (PCX) skyrocketed after reporting a narrower-than-expected third-quarter loss ... Leap Wireless (LEAP) emerged as a likely candidate for a put ratio backspread ... The Kroger Company (KR) was the subject of a calendar spread ... A bullish bettor opened a long call spread on MGM MIRAGE (MGM) ... Put volume ballooned on struggling QUALCOMM (QCOM) ... and today's Quote of the Day comes from Fortune's Hank Gilman, who hilariously examined why Wal-Mart Stores (WMT) is no longer synonymous with "evil" among mainstream America. Not only has Wall Street acted as a sort of lightning rod for the public's outrage, says Gilman, but the retailing giant is also reaping the benefits of weak competition:
"It helps that Eddie Lampert is running Sears and Kmart like Al Davis runs the Oakland Raiders."
But these weren't the only headlines hitting the Street today. Click on the links below for our Daily Option Blog coverage of:
And, in case you missed it, Jocelynn Drake discussed Murphy Oil (MUR) in this week's edition of Options Spotlight. Click here to watch the video.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
Crude futures staged a partial recovery from Monday's drubbing, as supply concerns helped black gold brush off an afternoon rebound in the U.S. dollar. Despite an up-and-down session that mirrored the indecisive action in the equities market, the bulls eventually won out ahead of this week's inventory reports from the Energy Information Administration (EIA) and the American Petroleum Institute (API). Analysts are forecasting a modest increase in crude supplies, but declines are expected to hit distillate and gasoline stockpiles. Crude for December delivery finally settled on a gain of 87 cents, or 1.1%, at $79.55 per barrel.
On the other hand, gold futures couldn't escape the wrath of the resurgent dollar. Rising risk aversion prompted investors to flock toward bonds and the greenback today, effectively dampening demand for gold as a currency hedge. As a result, gold for December delivery shed $7.40 to end at $1,035.40 per ounce, after earlier sagging to a three-week low of $1,032.90 per ounce.
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