Dow Gives Up 179 Points Amid Tapering Remarks, Goldman Downgrade

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"Goldman Sachs downgraded U.S. equities to 'underweight' this morning, as they see risk of a 10% drawdown, and this may have pressured stocks lower," said Schaeffer's Senior Options Strategist Tony Venosa, CMT. "However, the S&P 500 Index (SPX) is still holding above December's lows, as well as its significant 40-day moving average." Meanwhile, some tapering comments made by a regional Fed president also weighed on the market, as the Dow Jones Industrial Average (DJI) suffered its lowest daily close since Dec. 20.

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

plus...
    A Fed official cautiously supported further tapering by the central bank, the Treasury Department noted a record-high surplus in December, and option bears ignored General Motors Company's ( GM ) positive headlines.

After a brief stint in the black this morning, the Dow Jones Industrial Average (DJI - 16,257.94) gradually declined throughout the day, and ended up finishing 179.1 points, or 1.1%, lower. Merck & Co., Inc. ( MRK ) was the Dow's sole advancer -- gaining 6.5% on encouraging news surrounding its blood clot-preventing treatment -- while Microsoft Corporation ( MSFT ) paced the 29 laggards with a drop of 2.9%.

The S&P 500 Index (SPX - 1,819.20) charted a similar path as the Dow, and shed 23.2 points, or 1.3%, for the session. Meanwhile, the Nasdaq Composite (COMP - 4,113.30) fell 61.4 points, or 1.5%.

Elsewhere, the CBOE Volatility Index (VIX - 13.28) spent much of the morning in the red, but reversed course to close 1.1 points, or 9.4%, higher on the day.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

5 Items on Our Radar Today :

  1. Although Atlanta Fed President Dennis Lockhart tentatively spoke in favor of further cuts to the central bank's asset-buying program , he also warned that "both the employment picture and the inflation state of affairs have worrisome aspects." Nevertheless, the Fed official stated during a speech to the Rotary Club of Atlanta, "If all goes as expected, there is a policy transition under way from a QE world, so to speak, to a post-QE world." (Reuters)
  2. The Treasury Department said the U.S. government's deficit fell by 41% during the first quarter of fiscal 2014, thanks to last month's record surplus of $53 billion. The surplus was largely due to payments from Fannie Mae and Freddie Mac, which totaled almost $40 billion in December. (MarketWatch)
  3. Twitter Inc ( TWTR ) scored some bullish brokerage attention in the form of a price-target hike ahead of the opening bell.
  4. Bullish sentiment is running high toward JPMorgan Chase & Co. (JPM) ahead of tomorrow morning's earnings report.
  5. General Motors Company ( GM ) saw a notable spike in bearish options activity, despite today's handful of upbeat news headlines.

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 drifted lower today, as investors digested the possibility of increased oil supplies from Iran. The February contract shaved off 92 cents, or 1%, to end at $91.80 per barrel.

Meanwhile, gold futures notched a third straight day of gains, due in part to last week's lackluster jobs report. February-dated gold added $4.20, or 0.3%, to finish at $1,251.10 an ounce -- the loftiest closing price for a most active contract since Dec. 11.

SCHAEFFER'S MARKET POSTURE



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This article appears in: Investing , Options

Referenced Stocks: GM , JCP , MRK , MSFT , TWTR

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