Dow Brings Weekly Loss to 2.4% As Sell-Off Drags On

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"Late yesterday, the S&P 500 Index (SPX) broke below the 1,840 area, which had been a pretty significant area of former resistance and support," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Once that was breached, we saw an increase in selling pressure and downward momentum that continued this morning. JPMorgan Chase & Co. ( JPM ) also released its earnings report, and market participants were less than impressed. The session began on a negative note, and the selling pressure never really let up." By the close, the Dow Jones Industrial Average (DJI) had surrendered another 0.9%, bringing its weekly loss to roughly 2.4%.

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

  • As they consolidate around key moving averages, these 3 stocks could soon be ready to bounce .
  • Checking on Citigroup Inc ( C ) ahead of Monday morning's earnings report ... what is the speculative crowd expecting?
  • J.C. Penney Company, Inc. ( JCP ) options bears placed some well-timed bets ahead of this morning's drop in the shares.
  • Plus ... JPM earnings disappoint, consumer confidence improves, and speculative bears continue to flock toward Cisco Systems, Inc. ( CSCO ).
Trading Topic of the Week -- Tips for Trading Stock Trends: Don't sweat the small stuff . When you're playing trends, it's important to remember that stocks don't move in straight up-and-down lines. There's no need to panic out of the trade at the first hiccup in the share price.

The Dow Jones Industrial Average (DJI - 16,026.75) continued to slide into the red, notching an intraday low of 16,015.32 before settling off 143.5 points, or 0.9%. On a weekly basis, the blue-chip index slumped 2.4%. Twenty-five Dow components closed lower on the day, with JPM bringing up the rear, down 3.7%. Travelers Companies Inc ( TRV ) paced the advancing minority, adding 0.4%.

The S&P 500 Index (SPX - 1,815.69) also spiraled lower on the day, giving back 17.4 points, or 1%, to close at its lowest point since Feb. 10. The Nasdaq Composite (COMP - 3,999.73) declined 54.4 points, or 1.3%, to finish below the 4,000 level for the first time since Feb. 3. This week, the SPX dropped 2.6%, while the COMP lost 3.1%.

The CBOE Volatility Index (VIX - 17.03) continued to mount an advance, adding 1.1 points, or 7.2%, to bring its week-over-week gain to 22%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Technology stocks and small-caps kept underperforming, as the higher-beta names continued to get hit," added Bell. "Interestingly enough, the Nasdaq Composite is now set to battle with the round-number 4,000 area, which marked a bottom in early February."

5 Items on Our Radar Today :

  1. JPM disclosed that first-quarter earnings dropped 18.5% amid weakness in its trading and mortgage-lending divisions. Results came in south of expectations, but CEO Jamie Dimon asserted the financial firm has nonetheless "had a good start to the year." (The New York Times)
  2. Producer prices expanded by 0.5% last month , the Labor Department reported, and increased 1.4% on a year-over-year basis. Excluding volatile components such as food and energy, the core producer price reading edged up 0.3% in March. Elsewhere on the economic front, April's preliminary reading for consumer confidence rose to its highest level since July , per Thomson Reuters and the University of Michigan. Specifically, the reading spiked to 82.6 from a four-month low of 80 last month. (USA Today; Bloomberg)
  3. Amid continued criticism over technical issues plaguing the HealthCare.gov website, Kathleen Sebelius -- secretary of the U.S. Department of Health and Human Services -- announced her resignation . President Barack Obama has nominated Office of Management and Budget Director Sylvia Matthews Burwell to fill the role. (CNN)
  4. Intel Corporation (INTC) scored a price-target hike ahead of its earnings report next week.
  5. As it continues to struggle with resistance on the charts, Cisco Systems, Inc. ( CSCO ) was targeted by short-term put buyers.

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 :

Oil futures popped higher, cheered by an improved reading in consumer confidence that lifted hopes for energy demand. By the close, the May contract had added 34 cents, or 0.3%, to settle at $103.74 per barrel. Over the course of the week, oil prices surged 2.6%.

Gold futures faltered slightly, amid a stronger greenback. June-dated gold futures gave back $1.50, or 0.1%, to close at $1,319 an ounce. On a week-over-week basis, however, the precious metal gained almost 1.2%. Elsewhere, Russian supply concerns lifted the most active palladium contract to a two-year closing high.

SCHAEFFER'S MARKET POSTURE



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.

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This article appears in: Investing , Options

Referenced Stocks: JPM , C , JCP , CSCO , TRV

Schaeffer's Investment Research

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