"We saw a flight to safety today," said Schaeffer's Senior
Equity Analyst Joe Bell, CMT, of a day where the
Dow Jones Industrial Average (DJI)
suffered a triple-digit drop and closed south of the 15,000 level
for the first time since May 6. "Most growth-sensitive sectors were
dragged down, and bonds experienced a small bounce after their
recently horrific price action."
Continue reading for more on today's market, including
The U.S. economy grows at a modest pace, labor costs drop, and
Sprint Nextel (
) hopefuls zero in on short-term calls.
Dow Jones Industrial Average (DJI)
spiraled lower again today, finally ending with a loss of 217
points, or 1.4%, at 14,960.59. The index closed a hair below its
40-day moving average, which had not been violated on a daily
closing basis since Dec. 28. All 30 Dow components closed with
losses today, and bringing up the rear was Intel Corporation (
), down 2.6%. The Dow's "best" performer was Cisco Systems (
), which edged down 0.2%.
S&P 500 Index (SPX)
, also breached its 40-day trendline to the downside, as it
stumbled 1.4%, or 22.5 points, to settle at 1,608.90. Unlike the
Dow, which lost its grip on 15,000, the SPX remains north of the
psychologically significant 1,600 mark. The
Nasdaq Composite (COMP)
fared the best of the three major indexes -- albeit barely. At the
close, the tech-rich grouping was off 43.8 points, or 1.3%, at
CBOE Market Volatility Index (VIX)
zoomed 7.6% higher, adding 1.2 points to close at 17.50, the
barometer's highest settling point since April 18. The VIX is now
perched above its 80-week moving average, above which it has
managed just one weekly close since last June.
A Trader's Take
"There wasn't much to cheer about today," summarized Bell, "as
every major sector finished in the red. We had a slew of economic
reports this morning that were mostly worse-than-expected, and the
downward momentum that began late yesterday continued through most
of today. Many investors will now look ahead to May retail sales
tomorrow and the big jobs report on Friday."
3 Things to Know About Today's Market
- In 11 of the Federal Reserve's 12 districts, the economy
during the last six-week reporting period. (The outlier, Dallas,
reported "strong" growth.) The findings did indicate that the
"sequester," which began in March as government spending
tightened, is starting to have an impact on hiring plans.
- ADP's report on jobs growth in the private sector -- a
precursor to Friday's nonfarm payrolls data --
showed the creation of 135,000 jobs
last month. This was short of economists' expectations, but an
improvement over April's reading.
- Factory orders
climbed 1% in April
, which wasn't as sharp an increase as expected. Elsewhere,
first-quarter labor costs slipped at a seasonally adjusted annual
rate of 4.3% across U.S. businesses, surprising economists who
had projected a modest increase.
Productivity was revised lower
from earlier reports, to show a modest gain of 0.5%.
(Reuters, FOX Business)
5 Stocks We Were Watching Today
- As the takeover saga continues,
weekly call buyers
targeted Sprint Nextel (
) in hopes of capitalizing on short-term upside.
- Groupon (
) speculators remain
Optimistic Research In Motion (BBRY) traders
scooped up a variety of out-of-the-money calls.
- Ford Motor (F) put sellers wagered on
support at the 15 strike
- Salesforce.com, Inc. (CRM) was greeted with a
pair of price- target cuts
(and one upgrade) following news of its ExactTarget (ET)
For a look at today's options movers and commodities
activity, head to page 2.
Crude supplies dropped by more than expected last week -- to the
tune of 6.3 million barrels -- spurring oil futures higher on the
day. Oil for July delivery rose by 43 cents, or 0.5%, to close at
$93.74 per barrel.
Gold recaptured some of its safe-haven appeal today, as equities
continued their journey south. By the close, August-dated gold had
pared some of its gains, to finish up $1.30, or 0.1%, at $1,398.50
an ounce. The precious metal had earlier reached an intraday peak
of just above $1,410.
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