CLOSING WRAP-UP, Apr. 6
By Jody Osborne, Optionetics.com
4/6/2005 5:45 PM EST
Broader market gains ground Wednesday, but falls well off intraday highs. The Dow ($INDU) gained ground for the third straight session, adding 27.56 points to 10,486.02. The S&P 500 ($SPX) also rose, adding 2.68 points to 1,184.07. However, after seeing solid gains intraday, the Nasdaq ($COMPQ) closed the session at 1,999.14, a loss of 0.18 points. Volume remained light with just 1.43 billion shares traded on the NYSE and 1.74 billion shares turning over on the Naz. Market breadth was positive by a 19-to-13 and 16-to-15 margin on the Big Board and Naz respectively.
Oil prices fluctuated throughout the day, though the end result was a decline of just 19-cents to $55.85 a barrel. Initially, prices fell when the crude inventory report showed a rise of 2.4 million barrels last week. However, this was a bit below expectations, so oil prices never really fell far. Gasoline prices continued to rise as gasoline stocks fell once again last week. This has left gasoline prices at the pumps above $2 a gallon, which could eventually create problems in sentiment and consumer spending.
Chip stocks tried to rally early in the session after Merrill Lynch raised its rating on several chip stocks. However, the Philly Semiconductor Index ($SOX) closed with a gain of just one points, with resistance at the 200-day moving average holding. The SOX needs to break through this resistance and the 420 level before significant gains will be achieved.
MCI (MCIP) shares gained 1.52 percent Wednesday to $25.39 a share after the company announced it would accept the offer from Verizon (VZ) over a larger offer from Qwest (Q). Though Qwest’s deal was roughly 20 percent higher, MCI believes the company is better served merging with Verizon. Now it is up to Qwest as to whether they want to start a proxy battle or not. Q shares fell more than two percent on the session.
In after hours trading Wednesday, stocks are moving slightly higher. Dell (DELL) announced positive news after the bell, reaffirming guidance and raising its stock buyback plan to $2 billion. Another stock rising in after hours trading is Alcoa (AA). This stock officially kicks off earnings season and despite a decline from the year ago period; the stock is up more than a dollar after hours.
Thursday will see several economic reports announced, so this, combined with tonight’s news, should create some stock movement in what has been a very quiet week.
Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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