"The bounce that started yesterday continued in a big way today," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Biotech had a huge move, helping the Nasdaq Composite (COMP) up about 1.7%. Sparking the rally was the Federal Open Market Committee (FOMC) meeting minutes, which showed the central bank has no clue when to implement the first rate hike. Apparently, the fact that they can't agree is a good sign, as it could mean we have lower rates for a little longer than we thought yesterday." By the close, the Dow Jones Industrial Average (DJI) settled near its intraday peak, advancing 181 points.
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The Dow Jones Industrial Average (DJI - 16,437.18) blazed a steady path higher throughout the session, ultimately settling near its intraday acme, up 181.04 points, or 1.1%. All but four of the Dow's 30 components registered gains, led by Merck & Co., Inc.'s (NYSE:MRK) 3.7% ascent. AT&T Inc. (NYSE:T), meanwhile, paced the blue-chip black sheep, shedding 1%.
The S&P 500 Index (SPX - 1,872.18) followed suit, tacking on 20.2 points, or 1.1%, to end north of its 10-day moving average for the first time in four sessions. The Nasdaq Composite (COMP - 4,183.90) once again bested its peers, advancing 70.9 points, or 1.7%, to climb back into the black for 2014.
The CBOE Volatility Index (VIX - 13.82) declined as the session progressed, surrendering 1.1 points, or 7.2%, and erasing its week-to-date gain.
A Trader's Take:
"It is officially earnings season, and Alcoa Inc (NYSE:AA) reacted positively, up over 3%," added Detrick. "Now, yes, that's just one company, but it is a good start. One constant has been earnings revisions ahead of earnings season, and this quarter was no different. When the bar is set low, it is much easier to clear. Once again, the bar is set very low, with a near-record amount of pre-earnings warnings -- most saying things weren't great due to the poor weather. Just remember, should earnings come in lower than that bar, they won't be very well received."
5 Items on Our Radar Today:
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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