A Choppy End to a Positive Quarter (and Negative Month)

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The Dow Jones Industrial Average (DJI) broke its three-day winning streak, dropped back below 15,000, and suffered a triple-digit drop. The index did, however, manager to end the week and the quarter in positive territory (the month of June, however, was squarely in the red). "A disappointing Chicago PMI report set the tone early on today, causing most sectors to turn lower," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "The 10-year Treasury rate also moved slightly higher, which continues to weigh on the market at this point."

Continue reading for more on today's market, including :

plus...
    More market-moving remarks from the Fed, a dark day for Research In Motion ( BBRY ), and a large volatility play on silver.

The Dow Jones Industrial Average (DJI - 14,909.60) spent nearly all of the day in the red and cruised sharply lower as the closing bell approached. At the day's conclusion, the index was off 114.9 points, or 0.8%. In today's trading, just four Dow stocks closed in positive territory, with Home Depot ( HD ) leading the way, up 1.6%. Pacing the declining majority was IBM ( IBM ), which dropped 2.3%. For the week, month, and quarter, respectively, the Dow gained 0.7%, lost 1.4%, and rose 2.3%.

The S&P 500 Index (SPX - 1,606.28) held onto the 1,600 level but dropped nearly 7 points, or 0.4%. In June, the SPX fell 1.5%, but it added 2.4% during the second quarter. The Nasdaq Composite (COMP - 3,403.25) was the day's outperformer, edging up 1.4 points, or less than 0.1%. The COMP dropped 1.5% in June and closed the second quarter 4.2% higher.

The CBOE Market Volatility Index (VIX - 16.86) was unchanged at the close after spending time on both sides of breakeven. This month, the VIX added 3.4%, and jumped 32.8% for the quarter.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Utilities and consumer discretionary sectors were among the leaders today, as volatility continues to remain present in the current trading-range environment," observed Bell. "We also received a better-than-expected Thomson Reuters/University of Michigan consumer sentiment index, which helped some stocks move off their lows."

3 Things to Know About Today's Market :

  • Taking a more hawkish approach than some of his recently vocal colleagues, Fed Governor Jeremy Stein summarized recent improvements in the U.S. economy, and projected that bond purchases could begin to slow in September. Meanwhile, Richmond Fed President Jeffrey Lacker warned of more volatility as the tapering plan is worked through. (Reuters)
  • Consumer sentiment edged lower to 84.1 in June , down from 84.5 at the end of May. This was a better reading than analysts were expecting, and was largely attributed to continued health in the housing market. (Bloomberg)
  • Research In Motion ( BBRY ) was a notable disappointment in the earnings confessional, losing 13 cents per share in its fiscal fourth quarter. Analysts were expecting a per-share profit of 6 cents. Revenue also fell short of the mark, totaling $3.1 billion. BBRY shares tumbled nearly 28% in response. (CNNMoney)

5 Stocks We Were Watching Today :

  1. Our Option Idea of the Week features a bearish, intermediate-term play on Peabody Energy Corporation ( BTU ) , which continues to founder despite a backdrop of optimism.
  2. One trader wagered on continued volatility in the metals sector, opening a long-dated straddle on the iShares Silver Trust (NYSEARCA:SLV) .
  3. Long-term Zynga Inc (ZNGA) bulls scooped up deep-in-the-money calls.
  4. Webush Securities expressed a lukewarm outlook toward Tesla Motors Inc (TSLA) , initiating coverage with a "neutral" rating.
  5. Nokia Corporation (NOK) was the target of short-term option bears, who foresee a rocky week ahead.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Crude futures snapped a four-session winning streak, with August-dated oil ending a volatile session 49 cents, or 0.5%, lower at $96.56 per barrel. For the month, the front-month contract for black gold added 5%, but shed about 0.7% for the quarter.

After an intraday move south of the $1,200 mark, August-dated gold closed today with a gain of $12.10, or 1%, at $1,223.70 per ounce. But the day's move did little to save the precious metal from a record-setting quarterly loss of more than 23%. (Previously, the largest quarterly drop in the modern trading era was in the first quarter of 1982, when gold sank 18%, noted FactSet.) On a monthly basis, the front-month contract gave back 12.2%.

SCHAEFFER'S MARKET POSTURE



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This article appears in: Investing , Options

Referenced Stocks: BBRY , BTU , FB , HD , IBM

Schaeffer's Investment Research

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