Stocks powered higher right out of the gate this morning, defying early odds for a post-expiration week hangover. Lifting stocks early on were comments from St. Louis Federal Reserve President James Bullard, whose suggestion for the central bank to buy mortgage-backed securities into 2010 supported expectations for continued record-low interest rates. Elsewhere, the bulls cheered a bout of stronger-than-anticipated housing data, after the National Association of Realtors announced that sales of previously owned homes jumped a record 10.1% in October, skyrocketing to their highest level in more than two-and-a-half years. As a result, the greenback extended its slide against most of its foreign rivals, which bolstered dollar-denominated commodities into the black, and helped fuel the Dow Jones Industrial Average (DJIA) to a fresh 13-month high.
The Dow Jones Industrial Average (DJIA 10,450.95) enjoyed triple-digit gains for most of the session, advancing 132.8 points, or 1.3%, to finish at a new 2009 high. All but two of the Dow's 30 blue chips ended higher, with Alcoa (AA) and Merck (MRK) bucking the trend. Pacing the advancing issues were communications concerns AT&T (T) and Verizon Communications (VZ), with both equities adding roughly 2.9% apiece. The Dow is now poised to close the month atop its 20-month moving average for the first time since December 2007, but could find a potential speed bump in the round-number 10,500 neighborhood.
The S&P 500 Index (SPX 1,106.24) also spent the session in the black, adding 14.9 points, or 1.4%, to reclaim its perch atop the 1,100 level. Similar to its blue-chip brethren, the SPX is now in position to close the month above its own 20-month trendline for the first time since late 2007. Finally, the Nasdaq Composite (COMP 2,176.01) gained 30 points, or 1.4%, by the close, clawing its way back atop support at its 10-day moving average. However, the tech-rich index still faces a potential roadblock in the overhead 2,200 level, which has acted as resistance since mid-October.
Turning to equities in focus, commodities concerns Exxon Mobil (XOM) and Chevron Corp. (CVX) both scored a bullish brokerage note ahead of the bell ... Blockbuster Inc. (BBI) received a rather unfriendly note from the New York Stock Exchange (NYSE) ... Bearish bettors continue to bombard Silver Wheaton Corp. (SLW), despite the stock's technical feats this year ... Pre-earnings option players pounced on Blue Coat Systems (BCSI) ahead of its quarterly report... Andrea Kramer discussed how to protect your portfolio using puts... and today's Quote of the Day comes from Fortune blogger Stanley Bing. Ahead of the Thanksgiving holiday on Thursday, Bing expressed what makes him warm and fuzzy namely, job security, stating:
"I am thankful that Wall Street is still a festering sump pump of illogic, hubris and greed, and will continue to provide me with plenty to write about for the foreseeable future."
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 last week's hottest option plays in the most recent 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.
The ailing greenback and encouraging economic data gave crude futures a lift today. The greenback lost ground against a basket of its foreign rivals, after the Fed's Bullard affirmed expectations that U.S. interest rates would remain near record lows for some time. In addition, crude futures got a boost after customs data indicated that China's implied oil demand advanced 10% in October, compared to the period a year ago. Furthermore, escalating geopolitical tensions between Iran and the West helped buoy black gold. However, crude for January delivery which assumed front-month status today couldn't quite topple the $80-per-barrel marker by the close, finishing with a gain of 9 cents, or 0.1%, at $77.56 per barrel.
Gold futures surged into all-time high territory today, boosted by a negative session for the U.S. dollar. Bullard's dovish suggestion that the central bank should extend its plan to purchase mortgage-backed securities effectively reignited the market's inflationary fears -- particularly in the wake of a solid report on existing home sales -- which, in turn, stoked demand for the malleable metal as a currency hedge. After tagging a record intraday peak of $1,174 per ounce, gold for December delivery finished the session on a gain of $17.90, or 1.6%, at $1,164.70 per ounce.
Levels to Watch in Trading:
At the end of every market day, the staff at Schaeffer's Investment Research reviews the trading day in detail, covering major events and key market developments. Don't miss this critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.
Discuss this article:
Post your own comment
More articles:
Stocks took a turn for the worse today, showing very little of the bullish resilience that characterized Friday's afternoon rebound. In keeping with the recent trend, it was another dose of uncertainty that helped send stocks reeling. Traders are still considering the possible ramifications of near-crippling sovereign debt loads across the euro zone -- and now, the market is facing up to the fact that the U.S. central bank must begin to slowly unravel its wide-reaching stimulus efforts. A Wall Street Journal article on Sunday suggested that Federal Reserve Chairman Ben Bernanke "will begin this week to lay out a blueprint for a credit tightening," bringing anxiety on the topic to a boiling point today. Although no unwinding efforts will begin for "at least several months," the sheer uncertainty regarding the Fed's plans was sufficient to send bulls scrambling for shelter, leaving stocks to start the week on a decidedly downbeat note. read more...
Stocks spent most of the session wallowing in the red today, as economic troubles across the pond and an ambiguous unemployment report weighed on the Street. In Europe, Portugal passed a bill allowing the country's autonomous government to keep spending at will exacerbating earlier fears about lofty deficits in both Greece and Spain. Elsewhere, the government's highly anticipated payrolls report sent mixed signals to investors; while some were discouraged by the negative revisions to past statistics including a 76% increase in the number of pink slips issued in December others cheered an unexpected decline in the unemployment rate, which fell 0.3% to 9.7% in January. However, thanks to a dramatic eleventh-hour coup by the bulls, the major market indexes pared all of their losses by the close, settling on the north side of breakeven. read more...
The stock market was hit hard by economic worries today, with dismal data overshadowing a strong earnings report from tech bellwether Cisco Systems (CSCO). A downbeat mood began to sweep the Street prior to the opening bell, as Spain hiked its budget deficit forecasts through 2012 -- becoming the latest member of the euro zone to confess to crippling debt issues. News on the homefront was equally troubling; the Labor Department reported that initial jobless claims unexpectedly rose last week to 480,000, defying expectations for a decrease to 455,000. Ahead of tomorrow's highly anticipated nonfarm payrolls report for January, traders suddenly lost their appetite for equities and other riskier investments, sending the Dow to its lowest close of 2010. read more...
Weighing on stocks early today was the latest data from the Institute for Supply Management, which said its index of service activity rose by less than anticipated in January. The milder-than-expected reading overshadowed a promising report from payrolls firm ADP, which indicated that the private sector issued fewer pink slips than expected last month a hopeful sign ahead of the government's highly anticipated report on Friday. Elsewhere, Toyota Motors (TM) paved the road into the red amid more engineering issues as well as Transportation Secretary Ray LaHood's foot-in-mouth advice (which he later took back) that owners of Toyota vehicles should stop driving them. In addition, a weaker-than-forecast fourth-quarter earnings report from blue chip Pfizer (PFE), as well as President Obama's vow to crack down on big banks, helped stifle eleventh-hour rebound attempts. By the close, only the tech-rich Nasdaq Composite (COMP) eked out a gain, with the Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) snapping a two-session winning streak. read more...
Encouraging signs about the housing market fanned the bullish flames today, after the National Association of Realtors' pending-home sales index unexpectedly rose in December. Thanks to the extended tax credit for first-time homebuyers, the index inched 1% higher in December, compared to a 16.4% drop in November, when the credit was initially set to expire. Meanwhile, escalating the housing-related optimism was builder D.R. Horton (DHI), which swung to a profit for the first time since 2007 in its fiscal first quarter. Against this backdrop, the major market indexes extended Monday's trek into the black, marking the best two-session winning streak in three months. read more...
The bulls staged a disappearing act in January, with the market swallowing steep losses across the board, but buyers returned to the market today. After shrugging off solid corporate earnings during the past several weeks, traders actually seemed encouraged by a stronger-than-forecast fourth-quarter report from Exxon Mobil (XOM). A dose of healthy economic news didn't hurt, either; the Institute for Supply Management (ISM) noted that its manufacturing index improved to 58.4% in December, outpacing consensus estimates. Thanks to these positive developments, wary investors were finally lured back into the equities market. read more...
Traders woke up this morning to a surprisingly robust report on fourth-quarter gross domestic product (GDP), with the Commerce Department noting a 5.7% expansion in the U.S. economy. This marked the fastest rate of growth since the end of 2003, and the Dow Jones Industrial Average (DJIA) rallied to an early triple-digit gain. However, a closer look suggested that the upbeat report was mostly the result of businesses restocking inventories, rather than a meaningful rebound in consumer spending, and early optimism soon faded. Investors also considered the Senate's unenthusiastic reappointment of Federal Reserve Chairman Ben Bernanke, with the beleaguered Fed head receiving more "no" votes than any other chairman in history.Eventually, the bulls were unable to maintain control, with the tech sector blazing the path lower. Despite solid earnings reports from heavyweights Microsoft (MSFT) and Amazon.com (AMZN), the market was disappointed by a lukewarm forecast from SanDisk (SNDK). Against this backdrop, stocks reversed their early positive momentum, and fell into the red by midday. read more...
U.S. automaker Ford Motor (F) announced this morning that it raked in its first full-year profit since 2005, offering a ray of hope for the notoriously troubled auto sector. However, traders continued their recent habit of brushing off strong equity news, choosing instead to focus on macroeconomic uncertainties and uninspiring economic data. The market is weighing the threat of drastic financial sector reforms, the not-quite-certain reappointment of Federal Reserve Chair Ben Bernanke, and major concerns about slowing growth in China and devastating debt in Greece. Adding to this laundry list of worries was the day's jobless data, with the Labor Department confessing that initial claims for unemployment benefits declined by a smaller-than-expected margin last week. The number of claims remained bloated at 470,000, defying analysts' predictions for a drop to 445,000. As a result, the major market indexes spent yet another session wallowing in red ink. read more...
With all the excitement over the launch of Apple's (AAPL) newest gadget, the iPad, investors can be forgiven for nearly forgetting about today's interest rate decision from the Federal Open Market Committee (FOMC) -- especially since FOMC announcements have become a notorious non-event on Wall Street. Right on cue, the titans of monetary policy announced at 2:15 p.m. that they intend to keep interest rates at their current, rock-bottom levels for an extended period of time. In fairness, though, there was at least one iota of drama stemming from the Fed's monthly commentary: for the first time in a year, a member of the committee dissented from the group's decision. Kansas City Fed President Thomas Hoenig was the rogue central banker, stating his disagreement with this whole "extended period of time" bit. Stocks reacted by inching cautiously higher in afternoon trading, reversing early losses, and the bullish mood gained momentum into the close. read more...
Stocks spent most of the session in the black today, thanks to some upbeat data about the state of the American consumer. More specifically, the Conference Board reported that its consumer confidence index jumped to 55.9 in January from 53.6 in December, marking the third consecutive increase and the highest level in more than a year. Elsewhere, the International Monetary Fund added to the bullish sentiment after boosting its global economic growth forecast for 2010 to nearly 4% from 3.1%. The encouraging data combined with a stellar earnings report from tech heavyweight Apple Inc. (AAPL) helped to alleviate concerns in the wake of China's newfound efforts to curb lending, sending the Dow Jones Industrial Average to a near 90-point gain by midday. However, caution ahead of the Federal Reserve's interest-rate decision and President Obama's State of the Union Address effectively halted the bulls' run in the final hour of trading, sending the major market indexes into the red by the close. read more...
Today's Most Popular Stories
working... 
