Reply #75: time to call it a day [View All]

Dow 10,875.59 -6.08 (-0.06%)
Nasdaq 2,252.48 -8.15 (-0.36%)
S&P 500 1,267.32 -3.62 (-0.28%)
10-Yr Bond 44.48 -0.20 (-0.45%)
NYSE Volume 2,584,192,000
Nasdaq Volume 2,418,688,000

While upbeat corporate news, plunging oil prices and falling bond yields helped investors eye blue chip bargains midday following yesterday's stalemate session, late-day volatility on account of quarterly options expiration contributed to the market's inability to close in positive territory. Known as "quadruple witching," such options-related activity, coupled with a mediocre Q2 report from Oracle (ORCL 12.69 -0.14) offsetting Adobe Systems (ADBE 38.82 +3.89) strong Q4 report, closed the technology-heavy Composite near session lows. Some rebalancing on the Nasdaq 100 also added to the volatility as Google (GOOG 430.15 +7.62), which hit a new all-time high amid reports it shut out Microsoft (MSFT 26.90 -0.02) by paying $1.0 bln for a 5% stake in Time Warner's (TWX 18.00 +0.16) AOL, will be officially added to the Nasdaq 100 on Dec. 19. The absence of leadership in Energy, which continues to account for the bulk of earnings growth on the S&P 500 but got hammered to the tune of -2.3% amid weakness across energy complex, also weighed on overall sentiment. Consumer Discretionary also closed lower as downside guidance from Carnival Corp (CCL 52.65 -2.19) and RadioShack (RSH 22.19 -1.53) overshadowed the encouraging TWX news as well as strong earnings reports from KB Home (KBH 74.92 +0.98) and Darden Restaurants (DRI 38.81 +4.01). Despite strength in steel, after Steel Dynamics (STLD 34.36 +0.74) issued upside Q4 EPS guidance, and gains in copper, after Morgan Stanley raised their estimates on Phelps Dodge (PD 141.00 +1.31) -- a suggested holding in Briefing.com's portfolio for active investors, weakness in chemicals weighed on Materials. The biggest drag came from consolidation in Monsanto (MON 75.61 -1.40), which hit an all-time high just nine days ago. Consumer Staples, which was in focus and provided early support following reports of a potential leveraged buyout of Albertson's (ABS 24.33 +0.34), also lost ground as investors locked in gains from Procter & Gamble (PG 58.11 -0.88), which hit a 52-week high two days. Of the four economic sectors that managed to hold onto gains, the rate-sensitive Financial and Utilities sectors posted modest gains. The 10-yr note closed up 4 ticks to yield 4.44%. Health Care also finished on an upbeat note, benefiting from by Johnson & Johnson's (JNJ 60.86 +0.70) entry into the insulin delivery market by acquiring Animas Corp (PUMP 24.03 +5.83) for $518 mln, while strong follow-through buying in United Technologies (UTX 58.03 +0.43), spurred by an analyst upgrade, helped Industrials eke out a small gain. Separately, the Q3 current account balance narrowed slightly (to -$195.0 bln from -$197.7 bln) but still checked in at its third highest level ever. Since another large deficit was widely anticipated, though, the report had little impact on overall trading. Nasdaq 100 -0.8, Russell 2000 -0.2, SOX -0.6, S&P Midcap 400 -0.5, XOI -1.7, NYSE Adv/Dec 1597/1700, Nasdaq Adv/Dec 1385/1661