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Dow Jones Industrial Average Snaps Two-Day Slump

The DJI backed down from a test of 17,000, but still settled higher

by 7/9/2014 4:23:55 PM
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Stocks powered higher today, with a well-received earnings report from Alcoa Inc (NYSE:AA) setting the bullish tone. Along the way, the Dow Jones Industrial Average (DJI) launched another assault on the 17,000 level -- but ultimately backed down from its latest test of this millennium mark. Meanwhile, a fresh dose of clarity from the Fed on its policy-tightening plans caused a minor hiccup in the market's momentum around 2 p.m. ET, but bulls quickly reclaimed the reins. By the time the dust settled, the Dow's two-day skid was definitely over.

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

Trading Topic of the Week -- Ways to Interpret Short Interest: Review the recent trend. Have shorts been covering their bearish bets, or ramping them up?

The Dow Jones Industrial Average (DJI - 16,985.61) peaked at 16,998.95 this afternoon, but ultimately settled on a slimmer gain of about 79 points, or 0.5%. Twenty-two of the Dow's 30 components closed higher, with a 1.6% gain for The Walt Disney Company (NYSE:DIS) leading the way. The Boeing Company (NYSE:BA) was unchanged at the close, while DuPont (NYSE:DD) fell 0.4% to pace the seven laggards.

The S&P 500 Index (SPX - 1,972.83) rose 9.1 points, or 0.5%, and ended less than 2 points away from its session high. The Nasdaq Composite (COMP - 4,419.03) also finished strong, advancing 27.6 points, or 0.6%.

The CBOE Volatility Index (VIX - 11.65) backpedaled as stocks bounced, losing 0.3 point, or 2.8%. As a result, the VIX ended back below its 40-day moving average.



5 Items on Our Radar Today:

  1. Policymakers plan to conclude their economic stimulus efforts in October -- assuming the recovery progresses as expected-- according to the minutes from the latest Federal Open Market Committee (FOMC) meeting. The central bank's asset-buying program has been in place since September 2012. Now that there's some clarity on the stimulus drawdown, Fed-watchers will begin to place bets on when the FOMC will decide to raise interest rates. (BBC News)
  2. Alcoa topped expectations with its second-quarter earnings report, thanks to a solid performance by its aluminum smelting division. The industrial heavyweight announced a profit of 18 cents per share on $5.84 billion in revenue, besting the average analyst estimate for earnings of 12 cents per share on sales of $5.65 billion. AA shares ended the day up 5.7%. (Bloomberg)
  3. Short-term call buyers are looking for Facebook to finish the week strong.
  4. Reynolds American, Inc. (NYSE:RAI) hit a new record high as traders responded to buyout buzz.
  5. Despite the stock's tendency to slump post-earnings, option bulls eyed Nokia Corporation (ADR) (NYSE:NOK) ahead of its second-quarter report.

For a look at today's options movers and commodities activity, head to page 2.

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