Dow Declines 138 Points; Are More Euro-Zone-Spurred Losses Ahead?


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"The major market indexes were under heavy pressure early in the day, as European worries once again reared their ugly head," explained Senior Equities Analyst Joe Bell. "There was a resignation from a Greek official, more aid requests, and a seemingly never-ending disagreement among European officials about what to do next." And so, the Dow Jones Industrial Average (DJI) took a triple-digit tumble. As Bell pointed out, "Uncertainty leads to fear and fear quickly leads to selling."

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

  • Did the home construction sector capitalize on today's new homes report ?
  • See how the volatility indexes stacked up during the last three months.
  • Just how low can U.S. stocks bend on euro-zone anxieties ?
And now, a look at the numbers...



The Dow Jones Industrial Average (DJI - 12,502.66) experienced a more than 181-point swing today -- from a session peak of 12,639.87 to a late-session bottom of 12,458.01 -- and ultimately suffered a 138.1-point, or 1.1%, loss by the time the dust settled. Twenty-nine of the 30 blue chips closed with deficits, as Bank of America (BAC) and Hewlett-Packard (HPQ) paced the underperforming issues with a 4.3% and 4.1% drop, respectively. Wal-Mart (WMT) was the lone winner, turning in a 1.3% gain.

The S&P 500 Index (SPX - 1,313.72) sawed off 21.3 points, or 1.6%, while the Nasdaq Composite (COMP - 2,836.16) sagged 56.3 points, or roughly 2% -- the worst performance of its fellow benchmarks.

The CBOE Market Volatility Index (VIX - 20.38) soared 12.5% today, and tagged a session high of 21.36. This was the highest daily close for the VIX in over a week.

Today's highlight : "Although most sectors finished in the red, the market was able to regain a little footing as the day wore on," said Bell. "Homebuilders got a bit of good news from this morning's better-than-expected new home sales numbers, though the broad market selling pressure dampened the sector's response."

Turning to today's major market stories...

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

Oil futures extended last week's decline today amid concerns of lagging global demand and worries that this week's European Union (EU) summit will do little to solve that region's economic strife. Also, Tropical Storm Debby was forecasted to threaten oil rigs in the Gulf of Mexico, but passed with no incident. As the dollar strengthened, crude for August delivery slipped $0.55 cents, or 0.7%, to land at $79.21 a barrel.

Despite a decidedly down day on Wall Street, gold futures notched their second straight win, luring bargain-hunting investors back from the sidelines. Plus, the commodity's safe-haven appeal grew more enticing as Spain formerly applied for financial assistance , Cyprus joined the ranks of European nations looking for a bailout, and Germany raised questions as to how the euro zone will disperse any further economic relief. By the close, August-dated gold jumped $21.50, or 1.4%, to settle at $1,588.40 an ounce.

Levels to Watch in Trading :

  • Dow Jones Industrial Average (DJI - 12,502.66) - support at 11,500; resistance at 14,000

  • S&P 500 Index (SPX - 1,313.72) - support at 1,100; resistance at 1,500

  • Nasdaq Composite (COMP - 2,836.16) - support at 2,400; resistance at 3,400





For today's notable annual highs and lows, click here .


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 Nasdaq, Inc.

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