Stock Market Closes Mixed Amid "Triple Witching Hour"

Strategic Insights -

The stock market closed mixed in restrained trading, despite a fall in long-term interest rates and a decline in commodities prices, which should have sparked a broader rally. The Dow Jones industrial average rose nearly 21 points, while the S&P 500 rose 1.32 points. However, the Nasdaq composite index fell 0.87 point. Traders may have been wary of the "triple witching hour," when three sets of options and futures contracts expire each quarter, potentially distorting prices.

Key Takeaways:

  • The Dow Jones industrial average rose 20.93 points to 3,811.34, while the S&P 500 rose 1.32 points to 461.93.
  • Blue chip stocks like Exxon and Coca-Cola rose, but over-the-counter stocks like Microsoft and Intel declined.
  • Long-term interest rates fell due to a sharp drop in the Commodity Research Bureau index, a proxy for commodities traders' inflation outlook.
  • Bernard C. Savaiko, a senior analyst at Paine Webber Futures, noted that the index is heavily weighted toward food grains like wheat, corn, and soybeans, making it volatile.
  • The commodities index dropped 1.33 points to 237.28, largely due to a fall in orange juice and coffee contracts.
  • Bond prices rose sharply due to prospects for lower inflation, and the New York Stock Exchange composite index rose 0.85 point to 254.99.

Statistics:

  • The Dow Jones industrial average rose 20.93 points, to 3,811.34.
  • The S&P 500 rose 1.32 points, to 461.93.
  • The Nasdaq composite index fell 0.87 point, to 734.97.
  • Long-term interest rates fell 1.33 points, to 237.28 (Commodity Research Bureau index).
  • Bond prices rose 0.85 point, to 254.99 (New York Stock Exchange composite index).
  • Volume on the New York Stock Exchange was 256.4 million shares, about 13% below the year's average of 295 million shares.

Sources:

  • "The New York Times"
  • Paine Webber Futures (Bernard C. Savaiko)
  • Commodity Research Bureau (index)