What Will the Markets Do Today?

Yesterday, two of the major indices closed the day in the green, with the Dow ending the day virtually flat.

Index

Gain / Loss

Gain / Loss %

Ending Value

Dow Jones Industrial Average (INDEX: ^DJI ) -2.72 -0.02% 12,415.7
Nasdaq (INDEX: ^IXIC ) +21.50 +0.81% 2,669.86
S&P 500 +3.76 +0.29% 1,281.06

Surprisingly enough, though the Nasdaq was the most dominant index yesterday, the real story was financials. Bank of America (NYSE: BAC  ) was tops on the Dow with its 8.6% surge to greatness. This was largely fueled by the rumors of a refinancing plan for American homeowners. The White House later refuted the rumors, though, so financial stocks are likely to lose some steam today.

The market certainly showed some resilience yesterday after it clawed back the early morning loses. Will today be the same? Well, that largely depends on the quality of news released. Unemployment figures are due out early today. The market is expecting the unemployment level to come in at 8.7%, up from the prior 8.6%. This will come in the form of two major reports -- one from the Bureau of Labor Statistics, and one from the U.S. Department of Labor.

Also keep your eyes on the hourly earnings and average work-week figures. These are key measures for gauging industrial production and personal income.

Specifics to watch
The U.S. dollar made big gains against the euro, so look today to see whether it can hang on to the gains.

Sirius XM (Nasdaq: SIRI  ) made huge waves yesterday on the news that it added 540,000 subscribers in the fourth quarter of 2011. That brings its year-end total user base to 21.9 million. The company also reaffirmed its 2012 outlook, and adjusted earnings are expected to grow by 20%. This is all great news, but can the stock hang onto the 11.5% gain it rang up by market close? Only time will tell, but after a big push like that the stock may lose some steam today.

Look for a lot of activity in Direxion Daily Financials Bull 3X leveraged ETF (AMEX: FAS  ) The ETF picked up big gains yesterday, rising 3.6%, but the rumor-squashing by the White House could deflate its sails a bit. Leveraged ETFs are always a dicey bet and are best played over the short term. Investors holding this today should remember to be diligent and monitor the holding closely.

The better approach
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Austin Smith owns no shares of the companies mentioned here. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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