Dow, S&P 500 Finish Lower, Despite Post-Fed Bounce

By
A A A
Share |

"What a wild day," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "It was calm until the Fed minutes came out, and then it was a wild ride. In the end, the bears took control, and the Dow Jones Industrial Average (DJI) finished lower for a sixth straight day. You can dissect the Fed minutes all you want, but the reality is that August and September are historically troublesome months, and so far, that trend is playing out." By the time the dust settled, the Dow had suffered a triple-digit drop.

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

  • Given the market's short-lived Fed-induced bounce , Schaeffer's Senior Trading Analyst Bryan Sapp opines that the bears are "still in control" until the S&P 500 retakes 1,675.
  • In his latest Chart of the Day offering, our Senior Options Strategist Tony Venosa, CMT, makes a bearish case for Facebook ( FB ).
  • Today's edition of Small-Cap Spotlight takes a closer look at three low-priced stocks with upside potential, from a contrarian standpoint.
plus...
    The Fed said it's on track to taper current stimulus measures by year's end, existing home sales hit a multi-year high, and AT&T ( T ) saw a flurry of bearish options activity.

The Dow Jones Industrial Average (DJI - 14,897.55) touched an intraday low of 14,880.84, and then rose to a session high of 15,019.70 in the span of less than an hour this afternoon. By the close, however, the blue-chip barometer was back in negative territory to finish 105.4 points, or 0.7%, lower. Wal-Mart ( WMT ) led the Dow's three advancers with a gain of 0.4%, while Alcoa's ( AA ) 2% drop paced the 27 decliners.

The S&P 500 Index (SPX - 1,642.80) mimicked the path of its blue-chip brethren today, and ended with a loss of 9.6 points, or 0.6%. Meanwhile, the Nasdaq Composite (COMP - 3,599.79) fell 13.8 points, or 0.4%.

The CBOE Market Volatility Index (VIX - 15.94) experienced some rollercoaster movement of its own, but closed with an advance of 1 point, or 6.9%. The "fear gauge" is on pace to finish a second consecutive week atop its 20-week moving average.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"What is interesting is that, under the surface, there are many leading stocks holding up well," commented Detrick. "Names like Yelp ( YELP ), Green Mountain Coffee Roasters (GMCR), and 3D Systems (DDD) all held up in the face of the selling. Still, it is tough out there, and surging yields are scaring both bond and stock bulls alike."

3 Things to Know About Today's Market :

  • It looks like the Fed plans to scale back its bond-buying program by year's end, according to the latest Federal Open Market Committee (FOMC) meeting minutes , which were released earlier this afternoon. Although officials did not offer any hints as to exactly which month the tapering will begin, they ceremoniously agreed with Chairman Ben Bernanke's belief that economic conditions will continue to improve throughout the remainder of the year. (MarketWatch)
  • The National Association of Realtors said that existing home sales rose by 6.5% to an annual rate of 5.39 million in July. The latest figure easily surpassed the consensus view, and marked the fastest sales pace in more than three years. Meanwhile, the average price for a previously owned home jumped by 13.7% on a year-over-year basis to $213,500. (CNBC)
  • Target (TGT) reported a second-quarter profit of 95 cents per share, down from $1.06 per share in the year-ago period. Excluding items, however, earnings came in at $1.19 per share, while revenue rose 2% to $17.12 billion. Analysts, on average, were expecting a per-share profit of 96 cents on sales of $17.28 billion. (The Washington Post)

5 Stocks We Were Watching Today :

  1. Apple (AAPL) received a price-target hike amid buzz that its new Vevo Apple TV app could be released this week.
  2. Bullish traders converged on First Solar (FSLR) to wager on extended gains over the next few weeks.
  3. AT&T ( T ) lured back-month put buyers to the options pits as the stock flirted with its January lows.
  4. Options volume spiked on Citigroup (C) as both call and put players placed near-term bets.
  5. One neutral speculator constructed a collar on American International Group (AIG) by utilizing October-dated 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 fell for a third consecutive day, and dropped substantially after the release of the FOMC minutes. By the closing bell, October-dated oil -- now the front-month contract -- lost $1.26, or 1.2%, to end at $103.85 per barrel.

Similarly, gold futures finished in the red, and declined even further in electronic trading due to the latest Fed news. The December-dated contract shaved off $2.50, or 0.2%, to end at $1,370.10 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: AA , FB , T , WMT , YELP

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

Form 990 Explained
Form 990 Explained                  

Stocks

Referenced

Most Active by Volume

122,337,219
  • $61.20 ▼ 0.26%
79,860,597
  • $3.185 ▲ 0.47%
62,585,916
  • $4.35 ▼ 1.58%
50,979,711
  • $16.38 ▲ 0.06%
42,497,138
  • $87.56 ▲ 0.92%
34,083,520
  • $46.1521 ▼ 2.69%
33,798,853
  • $26.08 ▼ 0.65%
30,759,530
  • $34.4681 ▼ 1.29%
As of 4/24/2014, 03:34 PM