Dow Jones Industrial Average Suffers Steepest Weekly Loss of 2013

By
A A A
Share |

"After yesterday's broad-market sell-off, many sectors finished in mixed fashion as the week winded down," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Housing starts and building permits both came in close to expectations, while Treasury yields continue to skyrocket, and are now trading near multi-year highs." While the Dow Jones Industrial Average (DJI) finished off its session low, the index ended the day south of breakeven, and notched its worst weekly drop so far this year.

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

  • Today's edition of Option Idea of the Week takes a closer look at the seemingly unwarranted skepticism surrounding Campbell Soup ( CPB ).
  • Microsoft ( MSFT ) continued to be favored by bullish speculators, who wagered on an advance for the stock next week.
  • Weekly put sellers pounced on Ford Motor ( F ) in hopes that the security will stay north of $16 through the end of August.
plus...
    The latest figures for housing starts were just shy of expectations, Dell's ( DELL ) quarterly earnings report bested the consensus view, and bearish traders remained enamored with J.C. Penney ( JCP ).

The Dow Jones Industrial Average (DJI - 15,081.47) spent time on both sides of breakeven before sinking to an intraday low of 15,054.38 in the afternoon hours of trading. By the close, the blue-chip barometer was off 30.7 points, or 0.2%. For the week, the index shed 2.2%, marking the Dow's steepest weekly loss of 2013. Hewlett-Packard (HPQ) led the Dow's 10 advancers with a gain of 1.8%, while Verizon Communications (VZ) paced the 19 laggards with a decline of 1.7%. JPMorgan Chase (JPM) remained unchanged.

The S&P 500 Index (SPX - 1,655.83) was parked in positive territory for a short time this morning, but ended up closing 5.5 points, or 0.3%, lower. Meanwhile, the Nasdaq Composite (COMP - 3,602.78) fell 3.3 points, or 0.1%. On a weekly basis, the indexes lost 2.1% and 1.6%, respectively.

The CBOE Market Volatility Index (VIX - 14.37) dropped to a session low of 13.62, but narrowed the day's decline to 0.4 point, or 2.4%, by the closing bell. The "fear gauge" finished the week with a gain of 7.2% -- and above its 20-week moving average for the first time in over a month.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Yesterday's downward movement was met with a little bit of buying today," continued Bell. "While it may take a week or two to regain any sort of upward momentum, today may be a first step to building a base for the market to recover."

3 Things to Know About Today's Market :

  • The Commerce Department said housing starts climbed by a slightly softer-than-anticipated 5.9% in July to a seasonally adjusted annual rate of 896,000. Meanwhile, building permits rose by 2.7%, which was almost in line with economists' projections. Higher mortgage rates may have contributed to last month's lackluster figures. (CNBC)
  • The Thomson Reuters/University of Michigan consumer sentiment index arrived at a preliminary August reading of 80, marking an unexpected drop from July's final reading of 85.1, which marked a six-year high for the index. The pullback -- the largest monthly decline since December -- may be reflecting the effects of rising interest rates. (Bloomberg)
  • Dell ( DELL ) -- which is embroiled in a takeover battle between founder and CEO Michael Dell and activist investor Carl Icahn -- revealed an adjusted second-quarter profit of $204 million, or 25 cents per share, on revenue of $14.5 billion. Although earnings were down 72% on a year-over-year basis, the latest results still exceeded expectations for a per-share profit of 24 cents on sales of $14.2 billion. (Reuters)

5 Stocks We Were Watching Today :

  1. Applied Materials (AMAT) scored a pair of price-target hikes, despite yesterday's weaker-than-expected quarterly earnings report.
  2. Speculators continued to show their bullish enthusiasm for Apple (AAPL) by picking up weekly calls.
  3. Bearish traders were unimpressed by chatter of a potentially strong back-to-school season for J.C. Penney ( JCP ) .
  4. Put buyers showed a relatively rare interest in Lululemon Athletica (LULU) , and bet on near-term losses for the yoga apparel guru.
  5. Intel (INTC) experienced another surge in put volume, this time within the October series of options.

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 :

Crude oil futures finished higher for a sixth straight day, thanks to lingering worries over supply concerns out of violence-stricken Egypt. By the time the dust settled, September-dated oil tacked on 13 cents, or 0.1%, to end at $107.46 per barrel. For the week, crude advanced 1.4%.

Meanwhile, gold futures notched another day in the black, as ongoing tapering concerns continued to boost the precious metal. The December-dated contract added $10.10, or 0.7%, to finish at $1,371 an ounce. On a weekly basis, gold climbed 4.5%. Elsewhere, silver futures finished their strongest week in almost five years, with the front-month contract soaring 14% to a three-month high of $23.32 an ounce.

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.

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


This article appears in: Investing , Options

Referenced Stocks: CPB , DELL , F , JCP , MSFT

Schaeffer's Investment Research

Schaeffer's Investment Research
  • See all for Schaeffer's Investment Research
  • View Print Version

More from Schaeffer's Investment Research:

Related Videos

Stocks

Referenced

100%
83%
60%
82%

Most Active by Volume

89,970,926
  • $16.15 ▲ 0.12%
77,131,582
  • $58.94 ▼ 1.31%
67,336,935
  • $26.56 ▲ 1.68%
48,814,124
  • $86.20 ▲ 0.02%
47,526,126
  • $23.21 ▲ 0.78%
44,660,424
  • $23.91 ▲ 6.36%
38,799,699
  • $4.289 ▲ 4.36%
36,199,890
  • $40.01 ▼ 0.97%
As of 4/17/2014, 04:07 PM