(Updated with stock prices.)
NEW YORK (
) -- The Dow Jones Industrial Average closed at a new high for 2009 on Friday, amid a handful of expirations known to cause volatility.
Referred to as quadruple witching, contracts for stock index futures, stock index options, stock options and single stock futures all expired.
"You should see some volatility in the market, but normally the trend is positive on a day like today, especially if you open up positive in the morning," said Quincy Krosby, chief market strategist for Prudential Annuities. Statistically it should end on a positive note, she said.
Click below to hear my entire conversation with Krosby on quadruple witching, executive pay, earnings and the million-dollar-question -- where this market is headed.
rose 2.81 points, or 0.3%, to 1068.30 -- that's more than 20% above the 200-day moving average, points out Linda Duessel, equity market strategist at Federated Investors. "It's very rare to be trading above that, particularly in a month that's historically weak, so to get above it might be a tough thing," says Deussel. But closing above the nearest resistance point could be bad for the bears as it lessens the odds for a pullback, she says.
With some help from an upgrade-inspired 3.2% gain in
Procter & Gamble
Dow Jones Industrial Average
added 35.28 points, or 0.4%, to 9820.20. The
also increased 6.11 points, or 0.3%, to 2132.86.
Stocks posted the strongest weekly gains since July -- the Dow advanced 2.2%, and the S&P and Nasdaq tacked on 2.5% each -- suggesting again that the rally is durable. Still, observers are quick to point out overbought conditions as they question how long stocks can continue to advance.
Among the early headlines, Treasury "Pay Czar" Kenneth Feinberg is
the salaries for the 25 most highly paid employees at
Bank of America
American International Group
within 30 days, according to according to a report from Concept Capital, a research firm.
, which posted a narrower-than-expected loss on better-than-expected revenue,
16 million new shares to the public, effectively diluting existing shareholders by 11%. Shares fell 3% to $14.01.
"What everyone wants to hear about the third quarter is evidence of sales growth," says Duessel. Businesses have cut costs and let inventories sink to levels unseen, so operating leverage could be a surprise on the upside for earnings if the sales end picks up, she says, adding that a lot of analysts would have to lift their estimates again.
to earnings has to do with top-line revenue growth, in other words demand," agrees Krosby, but she adds that investors will have to be patient as it may be too early. The focus should be on guidance and what CEOs are saying about future sales, she says.
On the bright side, "you're going to typically hear the worst over the next couple of weeks, and then when we get into the earnings season proper we should expect to see more positive surprises as far as demand is concerned," says Krosby.
In other news,
after it released anxiously awaited study results for its experimental weight-loss drug lorcaserin.
In the study, 47% of lorcaserin patients lost at least 5% of their body weight, compared with 25% of placebo patients. The Food and Drug Administration approval guidelines call for a weight-loss drug to "approximately double" the percentage of patients losing 5% of their body weight. Shares climbed 5.5% to $5.18.
Stock Wrap: The Real Story, September 18
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were mixed. In Asia, the Nikkei in Japan and Hang Seng in Hong Kong fell 0.7% each. In Europe, London's FTSE 100 advanced 0.2%, while the DAX in Frankfurt fell 0.5%.
fell 43cents, to $72.04, and gold gave up $3.20, to $1,010.30.
-- Written by Elizabeth Trotta in New York.