Closing Wrap-Up, Nov. 17
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November 17, 2009
Gains continue for stocks Tuesday as traders digest retail earnings and economic data. The Dow ($INDU) added 30.46 points to a level of 10,437.42. The S&P 500 ($SPX) gained 1.02 points to 1,110.32. The Nasdaq ($COMPQ) tacked on 5.93 points to 2,203.78. Volume remained light once again with the NYSE trading 972.2 million shares and the Naz turning over 1.92 billion shares. However, market breadth was negative by a 14-to-17 and 13-to-14 margin on the Big Board and Naz respectively.
Shares of Microsoft (MSFT) benefited the Dow Tuesday after the software giant tacked on 1.56 percent to $30.00. Morgan Stanley raised its price target on the stock thanks to strong demand for Windows 7. This news helped the stock close at a new 52-week high. UBS also raised its target for MSFT shares to $34.
Dow component Home Depot (HD) put downward pressure on the index after falling 2.1 percent to $27.07. The home improvement retailer reported earnings that beat expectations, as well as raising its full year guidance. However, after gaining more than 20 percent in 2009, traders took profits with the housing sector remaining under pressure.
Target (TGT) also reported earnings, ending an eight quarter decline in profits. Nonetheless, the stock fell 3.04 percent to $48.76 thanks to a cautious outlook by the company. Target is in the midst of a battle with Wal-Mart (WMT) to get holiday shoppers. TGT stated that foot traffic was stronger in the quarter, but that shoppers were still buying fewer items per visit. Overall, the Retail HOLDRs (RTH) fell 0.98 percent to $94.05.
In economic news, producer prices rose 0.3 percent, which was 2-tenths lower than expected. The core rate actually fell 0.6 percent when a gain of 0.1 percent was anticipated. This put the year on year loss in the headline figure at 1.9 percent and the core rate up 0.7 percent. At the moment, inflation pressures remain light, but there remain concerns about how inflation pressures will impact the economy down the road.
Industrial production rose for the fourth straight month, up 0.1 percent, but below expectations for a gain of 0.4 percent. In the past year, industrial production is down 7.1 percent, which is worse than the prior month's 6.0 percent decline. Manufacturing has been a bright spot in the economic recovery, but we still could see some choppiness in activity in the months to come.
Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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