Dow Snaps Five-Day Winning Streak, S&P 500 Faces Resistance

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After five sessions of gains -- and more than one new all-time high -- the Dow Jones Industrial Average (DJI) succumbed to selling pressure today, ending the day with a triple-digit deficit. Elsewhere, "The S&P 500 Index (SPX) is clearly facing some pretty stiff technical resistance near the 1,900 round-number level, which is near the site of its former all-time high from April," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Couple that with the less-than-stellar economic data so far this week, and investors are looking to take some risk off the table."

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

Trading Topic of the Week -- Ways to Interpret Short Interest: Review the recent trend . Have shorts been covering their bearish bets, or ramping them up?

The Dow Jones Industrial Average (DJI - 16,613.97) spent nearly all of the day moving further into negative territory, before closing down 101.5 points, or 0.6%. The pullback was broad-based, as 25 of the Dow's 30 components ended lower, paced by International Business Machines Corp. ( IBM ), which dropped 1.8%. Leading the five advancers today was Merck & Co., Inc. ( MRK ), rising 1.1%.

The S&P 500 Index (SPX - 1,888.53) retreated as well, closing with a loss of 8.9 points, or 0.5%. The Nasdaq Composite (COMP - 4,100.63) continued its pullback, shedding 29.5 points, or 0.7%, by the close.


The CBOE Volatility Index (VIX - 12.17) bounced slightly from recent losses, edging up less than 0.1 point, or 0.3%, today.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Whether the market is up or down, it seems like small caps continue to trail their counterparts," continued Bell. "Consumer discretionary stocks are among the biggest laggards, and yesterday's worse-than-expected retail sales number and recent earnings results aren't helping their cause."

5 Items on Our Radar Today :

  1. Wholesale prices posted their largest increase in over a year in April, reported the Labor Department. The PPI climbed 0.6% -- the biggest jump since September 2012 -- to top economists' expectations. The core PPI, which excludes food and energy factors, rose 0.5%, also exceeding the consensus estimate. (Los Angeles Times)
  2. The yield on the 10-year Treasury note dipped to a six-month low of 2.525%. The move raised a flag, as some consider the 2.6% level a "risk-off" point at which traders begin to exit their equity positions. (CNBC)
  3. Tesla Motors Inc ( TSLA ) options buyers took advantage of bargain-basement pricing.
  4. Nomura reduced its price target on Google Inc (GOOGL) this morning, while other tech heavyweights faced negative brokerage attention.
  5. Fresh from a new 12-year high, Micron Technology, Inc. (MU) was targeted by back-month put buyers today.

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 :

June crude futures rose to a three-week high, amid declining supplies and increased expectations for rising seasonal oil demand. The most active contract added 67 cents, or 0.7%, by the close, to end the session at $102.37 per barrel.

Gold rebounded today, as continued Ukraine-related worries and a slump in U.S. equities bolstered the yellow metal's appeal. The June-dated contract climbed $11.10, or 0.9%, to settle at $1,305.90 an ounce, gold's first close north of $1,300 in more than a week.

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.

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This article appears in: Investing , Options

Referenced Stocks: AAPL , EBAY , TSLA , IBM , MRK

Schaeffer's Investment Research

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