By Leslie Wines, MarketWatch
Dec 16, 2005
U.S. stocks opened mixed amid options-related volatility Friday, with
General Motors in focus after its chief executive forecast revenue growth.
The Dow Jones Industrial Average was up 38 points at 10,919.
The S&P 500 was up 3.23 points at 1,274 and the Nasdaq Composite down 1.68
points at 2,258.95.
On Thursday stocks closed slightly lower, after a session made volatile by
the early impact of Friday's "quadruple witching" -- simultaneous
expirations of index futures, options on index futures, stock options and
individual stock futures.
The expirations tend to create volatility and exaggerate stock price
movements.
On Friday the expirations should work in favor of the stock market and
drive prices higher during early trade, although afternoon action is hard
to predict.
"I am looking for volatility throughout the day, with the major averages
slipping in and out of plus and minus categories throughout the day," said
Peter Cardillo, chief market strategist at S.W. Bach.
Gains also may be limited in the retail sector as" retailers are bracing
for another questionable holiday shopping weekend," according to Marc
Pado, U.S. market strategist at Cantor Fitzgerald.
Crude futures were below $60 a barrel, a factor which should lend support
to stocks. The front-month contract last was down 37 cents at $59.62 a
barrel.
In other positive news, the Commerce Department said the current account
deficit narrowed by 1% to $195.8 billion in the third quarter, marking the
second straight quarter of a narrowing deficit.
Gold futures were on the rise once more, last trading up 60 cents at
$507.20 an ounce. On Monday, the contract touched a 25-year high of $543
an ounce, rallying on strong physical demand and inflation fears.
The dollar weakened against the euro after a better-than-forecast reading
of a Germany's influential Ifo confidence survey, but later regained some
strength after the news of a narrower current account deficit.
The euro was quoted up 0.2% at $1.1988.
The dollar, which has endured a rout this week due to strong signals from
the Federal Reserve that its program of quarter-point rate increases is
nearing an end, last was down 0.2% at 116.16 yen.
Treasurys were carried higher in early dealings. The benchmark 10-year
note last was up 7/32 at 100-16/32 with a yield of 4.441%
Stocks in play
General Motors Corp. was 5 cents higher at $22.18. The auto maker's
chairman and chief executive Rick Wagoner told revelers at a holiday party
that the company's revenue will improve.
Oracle was down 1.9% at $12.57. Merrill Lynch upgraded Oracle to buy
following earnings results, while William Blair downgraded it.
XM Satellite Radio Holdings was off 3.6% at $29.85. J.P. Morgan downgraded
the stock to neutral from overweight, and cut its peer Sirius to
underweight from neutral. Sirius shares dropped 3.5% to $6.92.
Retail stocks were spot lit by uncertainty about the strength of Christmas
sales, as Urban Outfitters dropped 3% to $25.72.
Wal-Mart was up 15 cents at $49.40 and Target down 16 cents at $54.39.
The Gap rose 6 cents to $18.24 and Best Buy dropped 11 cents to $44.76.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
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SOURCE Thomson Financial Corporate Group
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