DJIA Drops 120 Points; Familiar Worries, Mixed Earnings Prompt Selloff

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"Earnings have been good, but revenue numbers have been light," noted Schaeffer's Senior Technical Strategist Ryan Detrick. "That reality, coupled with... drum roll, please... more European issues as Spanish yields spiked to new highs made for a very jittery market ahead of the weekend." With traders adjusting their portfolios as July-dated options rolled off the books, the Dow Jones Industrial Average (DJI) broke its winning streak and swallowed a triple-digit decline .

Keep reading to see what else was on our radar today:

  • Bernie Schaeffer offers a post-earnings dose of reality on General Electric ( GE ) shares.
  • Should you be buying when everyone is selling?
  • How to play the volatile silver options market in an affordable way.
And now, a look at the numbers...

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

The Dow Jones Industrial Average (DJI - 12,822.57) dropped lower out of the gate, and it was a slow churn for the entire session. By the close, the blue-chip index was just 12 points off its intraday low of 12,810.35, shedding 120.8 points on the day, or 0.9%. While the index closed up 0.4% for the week, it entered negative territory for July. Just three of the 30 blue chips finished in positive territory -- one of which was General Electric Company ( GE ), which inched up after reporting earnings this morning. Bank of America Corp ( BAC ) and Hewlett-Packard Company ( HPQ ) were among the worst performers, both losing more than 2%.

The S&P 500 Index (SPX - 1,362.66) was sharply in the red as well, giving back 13.9 points, or 1%. Elsewhere, the Nasdaq Composite (COMP - 2,925.30) went from first to worst, shedding 1.4%, or 40.6 points, and dipping south of its 80-day moving average. The SPX and COMP turned in respective weekly gains of 0.4% and 0.6%. Like the Dow, the COMP slid into the red for July.

The CBOE Market Volatility Index (VIX - 16.27) was turned away from an intraday high of 17.05 before ultimately closing up 0.8 point, or 5.3%. Since early June, the fear barometer has maintained a pattern of lower highs.

Today's highlight : "We made it through another expiration Friday," exhaled Detrick. "These days are usually very busy, and it always feels great when they're over. At the same time, it was great to see big banks once again lead us lower. This is a group that overall reported 'good' earnings, yet most of the names sank. If you are worried about a market pullback, this over-loved, underperforming group could be ripe for more losses."

Turning to today's major market stories...

For today's activity in commodities, options, and more, head to page 2.

Crude futures turned south today, as traders took some profits off the table following the commodity's seven-session winning streak. A stronger U.S. currency also weighed on dollar-denominated oil. By the close, the expiring August contract was down $1.22, or 1.3%, at $91.44 per barrel. On a weekly basis, though, crude jumped nearly 5%.

Gold futures notched a daily gain, thanks to reports indicating that Russia's central bank has been buying up bullion. August-dated gold shrugged off the dollar's advance to end up $2.40, or 0.2%, at $1,582.80 per ounce. For the week, the precious metal slipped 0.6%.

Levels to watch in trading...

  • Dow Jones Industrial Average (DJI - 12,822.57) - support at 11,500; resistance at 14,000
  • S&P 500 Index (SPX - 1,362.66) - support at 1,100; resistance at 1,500
  • Nasdaq Composite (COMP - 2,925.30) - support at 2,400; resistance at 3,400

OUTPERFORMING AND UNDERPERFORMING SECTORS

STOCKS - MOVERS

STOCKS - EARNINGS

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Click the links for coverage on today's notable annual highs and notable annual lows .

SCHAEFFER'S MARKET POSTURE

At the end of every market day, the staff at Schaeffer's Investment Research reviews the trading day in detail, covering major events and key market developments. Don't miss this critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options

Referenced Stocks: BAC , BRCM , CNQR , GE , HPQ

Schaeffer's Investment Research

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