14Jan2016 Market Close: Averages End Day Up Sharply, Oil Up Moderately, US Dollar Trades Sideways

Written by Gary

US markets ended session with solid gains. The DOW finished the day up 228 points and the Spooz (SP500) closed up 1.7%. A rise in crude-oil prices pushed energy companies sharply higher, with energy shares leading the S&P 500 gains. Is the ‘correction’ over?

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.
	Goldman Sachs to pay $15 million to settle SEC stock lending case (Reuters) – Goldman Sachs & Co will pay $15 million to settle civil charges that its securities lending practices violated federal regulations, the U.S. Securities and Exchange Commission said on Thursday.
	Oil up after eight-day rout; worries remain Iran will add to glut NEW YORK (Reuters) – Oil rebounded on Thursday, snapping an eight-day rout, as investors covered short positions but the market settled not far from 12-year lows on worries Iran may add barrels to a glutted global market sooner than expected.
	JPMorgan strikes confident tone after better-than-expected results (Reuters) – JPMorgan Chase & Co ended the year with a better-than-expected quarterly profit, helped by cost cuts and a smaller legal bill, and expressed confidence about its businesses in 2016 despite a grim start for stocks and energy prices.
	Allied Irish, Citigroup settle litigation over rogue trader NEW YORK (Reuters) – Citigroup Inc has settled long-running litigation in which Allied Irish Banks Plc accused it of helping rogue currency trader John Rusnak rack up a $691 million loss.
	Wall Street jumps as investors snap up energy, biotechs (Reuters) – U.S. stocks rebounded sharply in late Thursday trading as investors snapped up battered energy and other shares, while financials rose after upbeat results from JPMorgan.
	Fed to hike rates three times in 2016, economic outlook subdued: poll (Reuters) – The Federal Reserve will raise interest rates only three times this year as it faces a more subdued outlook for both the U.S. and world economies, a Reuters poll of economists found.
	Renault searched in emissions probe, says no sign of defeat devices PARIS (Reuters) – French carmaker Renault said fraud investigators had inspected three of its sites to look into its vehicle emissions technology – news that wiped billions off its market value in an echo of the scandal engulfing German rival Volkswagen.
	Falling inflation expectations could mean policy rethink: Fed’s Bullard MEMPHIS (Reuters) – The continued rout on global oil markets has caused a “worrisome” drop in U.S. inflation expectations that may make further rate hikes hard to justify, St. Louis Federal Reserve President James Bullard said on Thursday.
	Boeing sets sights on $2 billion United small jets order: sources PARIS/NEW YORK (Reuters) – United Airlines is close to deciding an order for about 30 small jets worth around $2 billion at list prices and Boeing looks well placed to win at least part of the deal after undercutting smaller rivals, industry sources said.
	How Switzerland Hopes To Prevent Refugee Sex Attacks: With This Cartoon The traditionally inert, neutral and quite homogeneous nation of Switzerland is not used to having cultural integration issues, which is why it has been watching recent events across the German border (and elsewhere in Europe) with sheer terror. And in order to preempt any possible outbreaks of refugee violence against women, or in general, ahead of the Lucerne carnival starting on February 4, Switzerland is getting ready. According to Blick, the Swiss department of Health and Social Services has prepared the following cartoon flyer dubbed “Ground Rules” which will be distributed to incoming migrants with hopes it will make it clear what is and isn’t permitted. It lays out various instances of accepted behavior such as kissing and praying, while making it clear that punching women and children in the head is frowned upon in polite society. The flyer was modeled after a comparable one, created in Austria last year as part of the initial wave of mass refugee influx. However, concerned that migrants would be less than inclined to read the text, the practical Swiss decided to populate it with “pictograms” or cartoons. According …
	The Machines Are Going Mad – HFT Quote-Stuffing Desperation Spikes To Record High It appears – for now – that the machines are losing control. Amid the chaos of the last few days in US equities, Johnny 5 and his ilk have been quote-stuffing in desperation at the highest rate in history… but it’s not working!! Source: @NanexLLC
	Complacent Correction Cause For Concern? Via Dana Lyons’ Tumblr, Despite recent stock market carnage, the reaction by the VIX has been a relative yawner. Well, the New Year hangover continues. Another day, another drubbing in the stock market. With indices pushing double digit losses just 8 days into the new year, it certainly seems reasonable to expect some panic on the part of investors. However, at least based on one metric, market participants have remained relatively calm – even unprecedentedly so. The metric we are referring to is the VIX, or the Volatility Index on the S&P 500. The VIX, a.k.a., the “Fear Gauge”, measures the expected volatility of the index. During times of crisis, or even a garden variety stock market decline, one can expect the VIX to rise. That has indeed been the case during the current stock weakness. However, based on the magnitude of the S&P 500′s decline, the VIX has risen by a historically small amount. Specifically, the S&P 500 has now dropped over 9% in the past 2 weeks. Despite that, the VIX has risen to just 25.22. Since 1987 (the VIX’ inception was in 1986), there have been 129 days on which the S&P 500 was down as much as 7% over the past 2 weeks. Today’s VIX reading is the lowest of any of those days. So what gives? Is this a sign of relative complacency despite the sharp market losses? That is a reasonable thesis, especially upon quantitative examination. Looking at the prior 128 days that showed a 2-week S&P 500 decline of at least 7%, just 15 had a VIX reading of less than 34. Now, thi …
	Energy Shares Lead Broad Stock Rally Investors got a reprieve from the early-year drubbing in stocks Thursday, as some of the most beaten-down corners of the market carved out sharp gains.
	J.P. Morgan’s Dimon Sounds Caution on Economy J.P. Morgan’s bankers and traders took pay cuts. Bad energy loans are piling up. And CEO James Dimon said major parts of the economy are œobviously going to get worse. But the nation’s biggest bank by assets still posted quarterly results that beat expectations
	Energy Sector’s Junk Bonds Continue to Suffer Losses are deepening in the market for low-rated energy debt, as investors fret anew that a prolonged slump in commodity prices and slowing economic growth will push many firms into default.
	Capitol Report: DJ Khaled’s unusual advice for Jeb Bush Musician DJ Khaled took to Jimmy Kimmel Live! to offer some words of wisdom for lagging presidential candidate Jeb Bush.
	Currencies: Dollar rises vs. main rivals as stocks, oil rebound The U.S. dollar edged higher against its main rivals Thursday as oil prices stabilized, reviving investors’ appetite for risky assets like stocks and commodity-linked currencies and dampening demand for haven assets like the yen.