Schaeffer's Trading Floor Blog

Market Update: DJIA Spikes 422 Points, Led by Caterpillar; VIX Plunges 8%

A coordinated central bank action and bullish jobs data have pushed the Dow sharply higher

by 11/30/2011 12:47 PM
Stocks quoted in this article:

U.S. stocks have catapulted higher today, with the major market indexes riding a fresh wave of macroeconomic optimism. In fact, the good news seems to be pouring in from all corners of the globe: Euro-zone leaders finally agreed on ground rules regarding the expansion of the European Financial Stability Facility (EFSF); policymakers in Beijing lowered their reserve requirement ratio for banks; and the Federal Reserve coordinated with the European Central Bank (ECB), Bank of England, Bank of Japan, and other major central banks to lower the cost of emergency dollar loans. And, as if the bulls needed another catalyst, the day's slate of domestic data was surprisingly robust. Payroll giant ADP announced that the private sector added a stronger-than-forecast 206,000 jobs last month, while pending home sales and the Chicago PMI also improved beyond economists' expectations. Against this backdrop, stocks are on pace to end the otherwise-dreary month of November on a high note.

At last check, the Dow Jones Industrial Average (DJIA - 11,978.25) is up 422.6 points, or 3.7%. The Dow has now climbed into positive territory for the month, up 0.2% for November. The S&P 500 Index (SPX - 1,237.30) has tacked on 42.1 points, or 3.5%, and the Nasdaq Composite (COMP - 2,604.76) has gained 89.3 points, or 3.6%. For the month, the SPX is off 1.3%, while the COMP has shed nearly 3% since the end of October.

VIX price chartChecking in on Dow components, all 30 blue chips are in the black this afternoon. Leading the pack higher is Caterpillar (CAT - 97.18), with a 7.3% surge.

As stocks soar, the CBOE Market Volatility Index (VIX - 28.19) has shed 8%. As a result, the VIX is on pace for a second consecutive monthly finish beneath the 30 level. For the month, the "fear index" has lost roughly 6%.

Among equities in focus, OmniVision Technologies (OVTI - 10.41) has shed 7% after investors and analysts alike panned the company's earnings and revenue guidance. Netflix (NFLX - 65.77) is also sitting out the day's rally, down 2.7% in the wake of a downgrade to "underperform." Elsewhere, Alaska Air Group (ALK - 67.96) is up 4.1% following its freshly announced inclusion in the Dow Jones Transportation Index (TRAN), and American Eagle Outfitters (AEO - 14.02) is enjoying a post-earnings rally of 4.4%. Over in the options pits, Corning (GLW) was targeted by put players after slashing its fourth-quarter forecast, while Commercial Metals (CMC) attracted some Carl Icahn-related call volume.


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