After dropping 100 points out of the gate, the Dow Jones Industrial Average (DJIA) performed an about-face, blazing a steady path higher in afternoon trading. Early on, slower-than-expected growth in China, as well as a jeopardized triple-A credit rating for France, weighed on the bulls. However, celebrated earnings reports in the banking sector -- primarily those of Goldman Sachs (GS) and Bank of America (BAC) -- helped stocks climb out of the hole, as did solid sentiment data on the housing front. Furthermore, a round of media reports touting France and Germany's agreement to bolster the euro-zone rescue fund added fuel to the bulls' late-session fire, helping the DJIA to a 180-point lead by the closing bell.
After falling as low as 11,296 in intraday action, the Dow Jones Industrial Average (DJIA – 11,577.05) climbed to a gain of 180.1 points, or 1.6%. Only IBM Corp. (IBM) and Coca-Cola (KO) ended lower, succumbing to earnings-related losses of 4.1% and 0.4%, respectively. Meanwhile, Bank of America paced the advancing blue chips with a gain of more than 10.1%.
The S&P 500 Index (SPX – 1,225.38) also clawed its way out of the red, tacking on 24.5 points, or 2%, by the time the dust settled. Finally, the Nasdaq Composite (COMP – 2,657.43) touched a mid-session nadir of 2,586.31, but added 42.5 points, or 1.6%, to finish near a session high.
Turning to equities in focus, VMware (VMW) and EMC Corp. (EMC) both stepped up to the earnings plate ... Crocs (CROX) issued a third-quarter profit warning ... Short-term call sellers converged on Sequenom (SQNM) ... Put players pummeled Altera (ALTR) ahead of earnings ... U.S. Steel (X) was slapped with a bearish brokerage note ... and today's Quote of the Day comes from Todd James, owner of Cutting Edge Haunted House in Fort Worth. In spite of a frightful economy, haunted houses are still scaring up big bucks, according to this USA Today article. While technological advances have allowed for scarier settings to entice customers, James notes that the "classics" are also quite profitable -- most notably:
"Clowns and chainsaws are always winners."
But these weren't the only headlines hitting the Street today. Click on the links below for our blog coverage of:
And, in case you missed it, Schaeffer's contributor Adam Warner weighed in on the VelocityShares Daily 2x VIX Short Term ETN (TVIX) . Click here for his take on this fast-moving trading vehicle.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
The Case for Big Moves in IWM and QQQ
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