CLOSING WRAP-UP, Mar. 15
By Jody Osborne, Optionetics.com
3/15/2005 4:45 PM EST
Bears win the battle, pushing stocks lower on the session. The Dow ($INDU) ended the session with a loss of 59.41 points to 10,745.10. The S&P 500 ($SPX) fell 9.08 points, closing the day at 1,197.75. The Nasdaq ($COMPQ) also declined, giving up 16.06 points, or 0.78 percent, to 2,034.98. Volume was average on the NYSE with 1.44 billion shares trading, but the Naz saw a stronger day with 1.98 billion shares traded. Market breadth was negative by an 11-to-22 and 11-to-20 margin on the Big Board and Naz respectively.
The major market indices opened to the upside this morning following a slew of economic news and a positive earnings report from Lehman Brothers (LEH). Oil kept a lid on gains Tuesday ahead of OPEC’s decision on production due out Wednesday. Oil prices fluctuated most the session, ultimately closing at $55.25 a barrel; a gain of 30-cents. Wednesday will be a big day for crude, with OPEC’s announcement and weekly inventory levels on tap.
LEH shares spiked to a new 52-week high Tuesday after announcing strong first quarter earnings. The financial company posted earnings that improved 31 percent on a 21 percent rise in revenues. These results beat expectations, helping lift the stock by 3.08 percent to $96.19 a share. Overall, the AMEX Securities Broker/Dealer Index ($XBD) rose 0.33 percent and is sitting close to a new high.
Economic news was abundant today, but capital flows and retail sales data garnered most the attention. Retail sales in February were a bit below expectations, rising 0.5 percent. However, both December and January figures were revised higher. However, there remain concerns about rising interest rates and high prices for gasoline. Both of these problems can have a dramatic impact on spending.
Economists and traders alike were pleased with data about capital flows in January. Flows into U.S. investments rose sharply during the month, well above expectations. In fact, the total amount of foreign inflows was the second highest on record at $91.5 billion. This is important because economists have been concerned with the falling dollar. When the dollar is dropping against other currencies, it can create less interest in U.S. assets, but so far, this hasn’t been the case.
Overall, neither the bulls nor the bears seem to be in a position to take control of the stock market. As we await first quarter earnings, stocks might just trade sideways, remaining in their trading range. However, we can expect some volatility within this range as traders take in oil prices and how this will impact future earnings.
Jody Osborne
Senior Staff Writer & Options Strategist
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