Stocks started the day on a negative note, after the latest quarterly earnings results from Dell (DELL) hit the Street with a resounding thud. The firm fell woefully short of analysts' profit and revenue expectations, sparking concerns about the health of the broader tech sector. Elsewhere, European Central Bank president Jean-Claude Trichet warned that "... it is too early to declare the [financial] crisis over." Nevertheless, Trichet indicated that supportive stimulus measures must soon be unwound, prompting traders to buy the U.S. dollar in a safe-haven stampede. The greenback's gains pressured oil futures lower, and energy stocks soon joined tech issues in the red.
The Dow Jones Industrial Average (DJIA 10,318.16) was down 61 points at its intraday nadir, but pared its losses to finish on a deficit of just 14.3 points, or 0.1%. Ten of the Dow's 30 components bucked the downside bias, led by Merck (MRK) and Pfizer (PFE). Meanwhile, Caterpillar (CAT) and General Electric (GE) paced the 20 declining blue chips. The Dow finished the week on a slim gain of 0.5%, and remains perched above its 10-day and 10-week moving averages.
The S&P 500 Index (SPX 1,091.38) also rebounded from its session lows, settling on a modest dip of 3.5 points, or 0.3%. The SPX gave up 0.2% this week, but -- like the Dow -- is still hovering north of its 10-week trendline. Finally, the Nasdaq Composite (COMP 2,146.04) swallowed the day's steepest drop, which still ended up being pretty modest -- the tech-rich index shed 10.8 points, or 0.5%, bringing its weekly decline to 1%. In keeping with its broad-market brethren, the COMP is positioned comfortably atop its 10-week moving average.
Turning to equities in focus, several major shareholders in Goldman Sachs (GS) are pushing for the bank to slash its employee bonuses ... Best Buy (BBY) was the target of a long put ladder ... Warner Chilcott (WCRX) was the subject of bearish speculation, despite its uptrend on the charts ... Cree Inc. (CREE) proved itself to be an excellent candidate for a short butterfly ... Chevron (CVX) drew heavy put volume after smacking into technical resistance ... and today's Quote of the Day comes from PC World's Jared Newman, who offered his two cents on the latest commercial from AT&T (T). The telecom titan, which is currently embroiled in a nasty marketing battle with Verizon (VZ), is trying to one-up the competition with a sassy new TV spot featuring Luke Wilson. However, as Newman sees it, AT&T's attempt at a snappy comeback falls flat:
"Unfortunately, the carrier ends up looking like the one kid on the playground who can't come up with a good 'yo mama' joke."
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, Andrea Kramer checked out some of the week's hottest option plays in this week's edition of Options Stew. Click here to watch the video.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
In the face of a strong U.S. dollar, crude futures ended the week on a negative note. The buck's bounce -- triggered by Wall Street's collective loss of risk appetite -- dampened demand for dollar-denominated commodities, as well as riskier assets, such as equities. Meanwhile, Valero Energy (VLO) announced that it will permanently shutter its 210,000 barrel-per-day refinery in Delaware City, due to persistently weak economic conditions. The day's downbeat earnings reports didn't help, either, as traders digested substantial disappointments from Dell and from home builder D.R. Horton (DHI). By the close, the expiring December crude contract shed 74 cents, or roughly 1%, to finish at $76.72 per barrel. Oil futures finished nearly flat for the week, adding just 37 cents, or 0.4%.
Elsewhere, gold futures shrugged off the U.S. dollar's advance. As traders anticipated a deeper correction in the equities market, the malleable metal had no trouble attracting buyers ahead of the weekend. Gold for December delivery ended the day up $4.90 to finish at $1,146.80 per ounce. On a weekly basis, the contract tacked on $30.20, or 2.7%.
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