WALL STREET : DJIA Ends Flat as Alcoa Provides Damage Control

S&P 500, Nasdaq Swallow Losses

Stocks spent most of the session beneath the breakeven line today, after the latest round of earnings reports did little to inspire the bulls. Specifically, a disappointing earnings showing from Pfizer Inc. (PFE) sparked a sullen tone on the Street, and not even stronger-than-forecast data on factory orders could bait buyers from the sidelines. Meanwhile, a significant sell-off in the commodities pits merely amplified the bearish momentum, with silver futures suffering their steepest single-session drop in more than two years. While a rumored buyout bid for Alcoa (AA) helped the Dow Jones Industrial Average (DJIA) eke out a fractional gain, the broader S&P 500 Index (SPX) and tech-rich Nasdaq Composite (COMP) finished with both feet in the red, while the CBOE Market Volatility Index (VIX) ended north of its 20-day trendline for the first time in more than six weeks.

The Dow Jones Industrial Average (DJIA – 12,807.51) flirted with modest gains and losses, eventually ending with a surplus of just 0.2 point. Alcoa blazed the path higher for the 19 advancing blue chips, tacking on 2.6% thanks to a rumored buyout bid from Rio Tinto. Meanwhile, Pfizer (PFE) unsurprisingly paced the 10 laggards, surrendering 2.8% in the wake of a disappointing earnings report. Home Depot (HD) epitomized the session by finishing flat.

Meanwhile, the S&P 500 Index (SPX – 1,356.62) settled on a loss of 4.6 points, or 0.3%, after finding an intraday foothold in the 1,350 neighborhood. Finally, the Nasdaq Composite (COMP – 2,841.62) once again fared the worst of the three, giving up 22.5 points, or 0.8%, by the time the dust settled. Nevertheless, the COMP's retreat was limited courtesy of its 10-day moving average, which is currently lingering in the 2,835 region.

In a nutshell

The U.S. stock indexes closed weaker today and saw more mild profit-taking pressure after hitting three-year highs early on. The bulls still have solid upside near-term technical momentum. Traders are now looking forward to Friday's key U.S. jobs report.

ANALYSTS QUOTES
“What’s really interesting is we’re seeing investors shift to more of a defensive stand -- the 10-year bond yield is falling, and people are putting more into bonds and higher-yielding stocks like utilities and telecoms.”

"Households have postponed or eliminated spending on a slew of services, such as restaurant meals and recreational activities. Combined with depressed levels of spending on housing, this puts the economy on a slower growth path as compared wit previous recoveries."

“We’re seeing a bit of wait-and-see approach: where can I get yield, where can I get less exposure from the metals and the things that have been doing well lately?”

HAPPY TRADING