Dow Loses 176 Points, Closes at Year-to-Date Low

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"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 the armor."

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

Trading Topic of the Week -- 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.

The 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. ( T ) led the Dow's seven advancers with a gain of 1.4%, while American Express Company (AXP) brought up the rear, down 2.2%.

The 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.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

5 Items on Our Radar Today :

  1. 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)
  2. 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. (Reuters)
  3. Southwest Airlines Co. ( LUV ) endured a notable intraday reversal in the wake of its quarterly earnings report.
  4. Why Arena Pharmaceuticals, Inc. (ARNA) is one small-cap name worth looking at.
  5. Following its turn in the earnings confessional, eBay Inc ( EBAY ) was swatted with numerous downgrades and price-target adjustments.

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 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.

SCHAEFFER'S MARKET POSTURE



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This article appears in: Investing , Options

Referenced Stocks: AAPL , EBAY , HLF , LUV , T

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