"China kicked things off with weak economic data last night, and
the selling only accelerated after U.S. economic data was a little
weak itself," observed Schaeffer's Senior Technical Strategist Ryan
Detrick, CMT, of a day that saw the
Dow Jones Industrial Average (DJI)
post a triple-digit decline. "The earnings we saw today weren't too
bad, but that was overshadowed by the poor economic data. Still,
the one concern I've had is that retail and consumer discretionary
stocks have done very poorly so far in 2013. Is this the canary in
the coal mine? Well, I'm not sure, but it is definitely a crack in
Trading Topic of the Week
Continue reading for more on today's market, including
-- Trading Stock Trends:
Don't be afraid to buy plenty of time.
When you're playing trends, go ahead and spring for that
longer-term option. You'll be buying valuable time for the expected
stock move to play out in full.
Dow Jones Industrial Average (DJI - 16,197.35)
dropped for the third consecutive day -- losing 176 points, or 1.1%
-- and closed at its lowest point since Dec. 19. AT&T Inc. (
) led the Dow's seven advancers with a gain of 1.4%, while American
Express Company (AXP) brought up the rear, down 2.2%.
S&P 500 Index (SPX - 1,828.46)
also fell, giving back 16.4 points, or 0.9%. The
Nasdaq Composite (COMP - 4,218.87)
declined 24.1 points, shedding 0.6%.
Not surprisingly, the
CBOE Volatility Index (VIX - 13.77)
closed solidly higher on the day, adding 0.9 point, or 7.2%. With
this move, the market's fear barometer settled above its 20-day
moving average for just the second time in 2014.
A Trader's Take
5 Items on Our Radar Today
Jobless claims edged up
by 1,000 to 326,000, while the four-week moving average slumped
for the third consecutive week. Elsewhere, December
existing home sales
rose 1% from the previous month, hitting an annualized rate of
4.87 million. This number was just shy of economists' estimates.
(USA Today; FOX Business)
- Taking a global toll today was
manufacturing data out of China
, which came in weaker than expected. Specifically, the HSBC
preliminary purchasing managers index (PMI) slumped to 49.6 this
month from 50.5 at the end of the year. Readings south of 50 are
indicative of contraction.
Southwest Airlines Co. (
endured a notable intraday reversal in the wake of its quarterly
Arena Pharmaceuticals, Inc. (ARNA)
is one small-cap name worth looking at.
- Following its turn in the earnings confessional,
eBay Inc (
was swatted with numerous downgrades and price-target
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures continued their upward march, even as inventories
rose. The March contract added 59 cents, or 0.6%, to settle at
$97.32 per barrel.
Gold futures gained ground as well, amid falling equities and a
weakened dollar. Gold for February delivery rose $23.70, or 1.9%,
to close the session at $1,262.30 an ounce -- the highest level for
a most active contract since mid-November.
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