U.S. stocks mostly finished higher on Tuesday amid choppy trading.
In the end, the Dow Jones Industrial Average gained 0.1%, the S&P 500 gained 0.2%, the Nasdaq Composite lost 0.2% and the Russell 2000 gained 0.2%. Treasury bonds were mixed, the dollar gained, gold moved higher and oil came under fresh selling pressure for a 2.6% loss to close at $35.81 a barrel.
China remained the focus as Beijing implemented measures to stabilize its markets, including a possible delay to the end of a ban on insider selling. The People’s Bank of China injected around $20 billion into its credit markets — the largest liquidity injection since September.
Separately, U.S. auto sales missed estimates but 2015 still managed to be a record year for new car purchases. December sales showed a 17.2-17.4 million seasonally adjusted annualized rate, below the 18.1 million expected (which, if it would’ve happened, would’ve been the first ever four-month streak above the 18 million level ever).
At the sector level, defensive telecom stocks led the way with a 1% gain. Smith & Wesson Holding Corp. (NASDAQ:SWHC) gained 11.1% on a positive earnings preannouncement and relief President Obama’s executive action on gun control wasn’t as bad as many feared. First Solar, Inc. (NASDAQ:FSLR) gained 8% after an upgrade at Goldman Sachs.
Technology stocks were the laggards, down 0.4%. Apple Inc. (NASDAQ:AAPL) lost 2.5% after Nikkei reported the company is expected to reduce output of its iPhone 6s models by around 30%. Supply chain vendors were hit with Skyworks Solutions Inc. (NASDAQ:SWKS) down 6%.
The drop boosted the Jan $110 AAPL puts recommended to Edge Pro subscribers to a gain of 181% since first recommended on Dec. 17.
Technically, stocks remain vulnerable as all eyes turn to Friday’s non-farm payroll report for possible hints on the pace and timing of subsequent rate hikes from the Federal Reserve. The Dow, as shown in the chart above, is desperately hanging on to critical support going back to October near current levels.
A breakdown here would but the August-October lows back in play.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
