Dow Jones Industrial Average Brushes Off Big Blue; Small-Caps Show Signs of Life

Crude oil resumed its recent downtrend, while gold gained ground

Oct 20, 2014 at 4:22 PM
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The Dow Jones Industrial Average (DJI) traded in a roughly 141-point range today, eventually settling with a 19-point gain. This, despite a poorly received earnings report from blue-chip International Business Machines Corp. (NYSE:IBM), which plunged more than 7% in the wake of its results -- its biggest one-day drop since April 2013. This bullish bias was witnessed elsewhere on the Street, with the broader S&P 500 Index (SPX) closing above 1,900 for the first time since Oct. 10, and the Nasdaq Composite's (COMP) 1.4% pop easily outpacing its peers. Small-caps also showed signs of life, with the Russell 2000 Index (RUT) adding 1.2%.

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

The Dow Jones Industrial Average (DJI - 16,399.67) spent time on both sides of breakeven today, eventually closing 19.3 points, or 0.1%, higher. Of the Dow's 30 components, 24 finished in the green -- led by The Walt Disney Company's (NYSE:DIS) and Nike Inc's (NYSE:NKE) 2% pops. IBM paced the four decliners with its 7.1% drop.

The S&P 500 Index (SPX - 1,904.01) stair-stepped its way higher throughout the session, adding 17.3 points, or 0.9%, by the close. In similar fashion, the Nasdaq Composite (COMP - 4,316.07) spent almost the whole day in the green, tacking on 57.6 points, or 1.4%.

The CBOE Volatility Index (VIX - 18.57) charted a path steadily lower, finishing with a 3.4-point, or 15.6% loss. What's more, the market's "fear gauge" closed south of its 10-day moving average for the first time since Oct. 8.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

5 Items on Our Radar Today:

  1. IBM surrendered more than 7% today, after reporting a third-quarter earnings miss this morning. What's more, Big Blue pulled its fiscal 2015 earnings forecast and said it will pay Globalfoundries $1.5 billion to take over its chip-manufacturing unit, a move that will result in a third-quarter pre-tax charge of $4.7 billion for IBM. Meanwhile, amid the stock's steep sell-off, Warren Buffett, whose Berkshire Hathaway Inc. (NYSE:BRK.B) is IBM's largest shareholder, lost roughly $1 billion.(Bloomberg)
  2. The courtship between CSX and CP has ended. Rumors of a potential merger hit the wires last week, but today, the two rail companies said they are no longer in talks to combine, citing regulatory concerns. (USA Today)
  3. Analysts at Wedbush think AAPL's roll-out of Apple Pay could be a boon for NCR Corporation (NYSE:NCR), which plunged 21.2% today on a dreary outlook. (MarketWatch)
  4. SHLD soared 23.1%, as CEO Eddie Lampert offered up another cash infusion.
  5. Facebook Inc (NASDAQ:FB) saw notable option activity, as weekly traders bet on a pullback by Friday's close.
EARNINGS

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

STOCKS – NOTABLE CALL ACTIVITY

STOCKS – NOTABLE PUT ACTIVITY

Commodities:

Crude oil resumed its recent downtrend today, on continuing oversupply concerns. By the close, the December-dated contract had shed 15 cents, or 0.2%, to settle at $81.91 per barrel.

Uncertainty surrounding the global economy was a boon for gold futures, with gold for December delivery -- the most actively traded contract -- tacking on $5.70, or 0.5%, to close at $1,244.70 per ounce.

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