Dow stages big rally, but watch out for what's next

The blue chips jump 181 after reports on jobless claims and retail sales cheer investors. Friday brings reports on consumer confidence and options expirations.

By Charley Blaine Jun 13, 2013 5:34PM
© Kick Images, Photodisc, Getty ImagesUpdated: 2:35 a.m. ET Friday

If you're a bull, you had to love Thursday's stock market.

The Dow Jones industrials ($INDU) jumped 181 points, recovering more than 70% of its losses from Monday, Tuesday and Wednesday.

As important: The Standard & Poor's 500 Index ($INX) didn't come close to testing 1,600, a very important support level, and buyers are coming into the market when it hits its 50-day moving average, a key indicator of investor confidence. Meaning: Attacks on stocks that may come over the summer will run into stiff resistance.

But Friday has the potential to offer some gyrations. A lot of options expire, and stocks may move wildly as a result, particularly at the close. In addition, many traders (of their computers) will be getting ready for next week's big Federal Reserve meeting.

The Dow ended the day at 15,176, a 1.2% gain and its first gain after three straight losses. The S&P 500 added 24 points to 1,636, and the Nasdaq Composite Index ($COMPX) rose 45 points to 3,445.

Well and good, but the market is experiencing a wave of volatility it hasn't seen in about a year. Starting on May 28, when the Dow jumped 106 points to a record close of 15,409, the blue chips have moved up or down 100 points a day in nine of 13 sessions. 

There were two catalysts to help Thursday's market: a decline in initial jobless claims for the latest week and a chipper report on retail sales in May, pushed along by strong auto sales.

Plus interest rates fell; the 10-year Treasury yield dropped to 2.174% from Wednesday's 2.23%.

All of that news offset a horrible day in Japan: The Nikkei 225 Index ($JP:N225) fell 844 points on Thursday, ending the day down more than 21% since peaking on May 22. That's bear-market territory. The index had been up as much as 50% before the sell-off began.

But the index rebounded on Friday, rising 241 points to 12,687. But there was a bit of a downside: The index had been up more than 455 points at 2:20 p.m. Tokyo time before heavy profit-taking set in.

In addition to the option expirations and Fed worries, the market will face the monthly Produce Price Index report, a report on industrial production and the University of Michigan's second read on consumer confidence in June.

As stocks rose, gold (-GC)  fell $14.20 to $1,377.80 an ounce. Platinum (-PL) fell harder, $35.20, or 2.4%, to $1,447.10 an ounce. Silver (-SI) dropped 21.3 cents to $21.58 an ounce. Silver is off 23.8% this quarter, 28.6% on the year.

Crude oil (-CL), however, was up 81 cents to $96.69 a barrel in New York. Brent crude was up 77 cents to $104.26 a barrel.

All 10 sectors of the S&P 500 were higher, with telecom, financial and consumer discretionary stocks the leaders. Home builders and real estate stocks were especially strong.

Twenty-eight of the 30 Dow stocks were higher. Eight stocks -- IBM (IBM), 3M (MMM), Caterpillar (CAT), Chevron (CVX), United Technologies (UTX), Exxon Mobil (XOM) Travelers Companies (TRV) and Walt Disney (DIS) contributed 109 points to the index's gain.

The only losers -- and not by much -- were Microsoft (MSFT) and DuPont (DD). (Microsoft owns and publishes Top Stocks, an MSN Money site.)

Meanwhile, 476 S&P 500 stocks were higher. Gannett (GCI) was the leader, up $6.75 to $$26.60 after agreeing to acquire broadcaster-and-newspaper publisher Belo (BLC) for $1.5 billion. The broadcast stations were the keys to the deal. Belo, which owns the Dallas Morning News, jumped $3.04 to $13.77.

And 95 Nasdaq-100 ($NDX) stocks were higher, led by Kraft Foods (KRFT) and Sears Holdings (SHLD). The index jumped 37 points to 2,963.

More on Top Stocks
Jun 13, 2013 6:26PM
The oil traders and speculators are getting to the pathetic point. Oil almost $97 a barrel and why? Do they think that consumers are stupid? Record inventories, low demand and no basic fundamentals whatsoever to support prices like this. Washington needs to wake up out of their coma and crack down on excessive speculation practices in futures trading by forcing these clowns to take full physical delivery of all products bought. The fat pigs continue to get fatter by the day.
Jun 13, 2013 6:28PM
Blah, Blah, Blah....setting everybody up for the slaughter to come.  Outrageous manipulations going on.  Keep a close watch on your wallet.  They're suckering everybody in for the bloodbath.
Jun 13, 2013 6:27PM
Every time they said something good about job data then the DOW goes up. If go want a good economy all government have to do is announce they have a good job data to boost the economy. Dumb investors will buy it even though not real. You just manipulate people to buy into. Hahahahhah
Jun 13, 2013 9:49PM
Watch for either a tanker, refinery or pipeline mishap early into the summer to help boost that price per barrel of oil.
Some interruption of supply will temporarily drive up the price for a few months.
Jun 14, 2013 2:40AM
Take your money out wait for the next crash ride it up and repeat repeat repeat
Jun 14, 2013 6:17AM
Want to fix the economy? Get the Oil prices down and the rest will follow. What the government does not talk about is that people are putting their money in the tank one way or another (credit or credit) and not spending what they could on goods. I agree with brent011 that the government especially the Obama administration should address the situation and quit with the smoke and mirrors on ever other b-sh-- issue they come up with such as re- distribution of wealth. I think most people know that if you have 3 people and you give each 1 dollar that with in a short period of time 1 person will have all 3 dollars.
Jun 14, 2013 6:59AM
But watch out for Friday? What are we reading  . . Fortune Cookies?

The stock market is a joke anymore.
Jun 13, 2013 10:04PM
If economic data were strong, then why interest rates and the dollar would fall? 
Jun 14, 2013 6:17AM
The gains and the loses go up and down, up and down, up and down. Just like the wheels of a bus go round and round!
Jun 13, 2013 10:16PM
Article title now confirms this is a sick joke...
Jun 14, 2013 12:33AM
Jun 13, 2013 11:53PM
I don't even understand why they even talk about all that jobless stuff and those other "numbers." How can that have any effect on whether the Dow goes up or down? What? What does blue chips have to do with anything? I don't see why they figure all that stuff makes a difference about all this stuff.
Jun 14, 2013 2:35AM
Energy stocks in short term look interesting as Obama has announced officially that we will begin arming the Syrian rebels in two weeks. We have been in there all year. The tension from Russia and China's response will build up oil futures. Best thing we can all do is buy the most economic gas vehicle we can or go all electric. Check out wwwdot Eliot Motors dotcom
Jun 14, 2013 10:35AM
Oh boo Hoo, watch out for Friday!   Pffft.   Told ya.
Jun 14, 2013 10:34AM
Thanks for the fear mongering.  People feel off center because of the media.  
Jun 13, 2013 9:09PM
There is no "short" in "speculation" as it designed that way in puts and calls and trading can be done in seconds by a keystroke.  It is done on the same "floor" and in conjunction with "multiple" in concert with this.  That "floor" is a phone call...this is not other than "trading" what they "own" in pensions and K's.  Your money is not your's.......not now....churn and burn....them.  You have allowed this...why not change it?   
Jun 13, 2013 11:57PM
What I would like to know is: How come Stock Scouter has not provided a rating for Michael Kors Holdings? Very mysterious. The stock is rated by other analysts. Waiting, waiting for the stock to get up and start going, but it seems broken.
Jun 13, 2013 8:57PM
When you look at who gained today, you suddenly realize that old wealth is totally freaked out about joining the rest of us on Earth. The old stalwarts of the 20th Century have no capacity in the 21st, so when you see big gains for lame names, you know today was propped. Today was a Kool Aid event. 
Jun 13, 2013 7:26PM
Oh boo hoo.  Watch out for Friday.  pfft.
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