Nasdaq Sets New Record As Stocks Slide At The Close
Stocks rallied to all-time highs Friday, but dropped sharply toward the close in a “triple witching†day of volatility. According to preliminary numbers the Dow rose 12.54 to 11257.43, the Nasdaq gained 38.09 to 3753.15, and the S&P 500 added 2.28 to 1421.06. The Nasdaq managed to hold on to another record close.
Helping trigger Friday’s rally was an inflation-friendly report on housing. November housing starts came in at 1.60 million which was below the 1.65 million that analysts expected. Even though news also came out that building permits increased by 1.3%, stocks interpreted the cooling of the housing market as bullish.
Top-performing groups on Friday included gold and silver [$XAU.X>$XAU.X], up 2.2%; forest and paper products [$FPP.X>$FPP.X], up 1.6%; and chemicals [$CEX.X>$CEX.X], up 2.6%,
Groups on the downside included insurance [$IUX.X>$IUX.X], down 1.7%; computer software [$CWX.X>$CWX.X], down 2.1%; and retail [$RLX.X>$RLX.X], down 2.2%.
Tandy [TAN>TAN] was hammered Friday after warning of a decrease in same-store sales. The parent company of Radio Shack plunged 13 to 53 and was the weakest component of the retail group.
Helping the Dow to briefly trade in record territory was General Electric [GE>GE], which closed up 3 3/8 to 151, for an all-time high close. GE’s announced 3-for-1 stock split helped send the stock higher. Cyclicals also helped the Dow, with solid gains by Alcoa [AA>AA], International Paper [IP>IP], and Du Pont [DD>DD].
Weighing on the Dow toward the end of the day were Merck [MRK>MRK], Caterpillar [CAT>CAT], and Wal-Mart [WMT>WMT]–which all closed down by more than 4%.
A split announcement also took chip-maker KLA-Tencorp [KLAC>KLAC] higher. For the day KLA-Tencorp added 3 11/16 to 96 9/16.
Nike [NKE>NKE] soared 6 3/4 to 52 7/16 on news the athletic shoe and apparel maker beat earnings estimates by 4 cents. The stock also received upgrades from Merrill Lynch and JP Morgan. The surge from Tuesday’s recent 39 13/16 low may be a sign of a rebounding world economy. Future orders increased 15% in Europe and 24% in Asia, but actually fell 8% in the US. Nike is still substantially off its 52-week high of 66 7/8 that it hit last May.
Traders now look ahead to Tuesday’s FOMC meeting, but Fed watchers generally believe that the Fed will not take any action on rates.