Dow, S&P 500 Post Worst Month Since May 2012

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"It was a very light volume day ahead of a three-day weekend, but that didn't mean it was boring," quipped Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Rumors regarding Syria continued to swirl, creating some decent volatility on a day that is usually incredibly slow. In the end, the indecision over Syria isn't something traders want to hear, and it led to selling across the board." The Dow Jones Industrial Average (DJI) was in the red for nearly all of the day, hitting an intraday nadir of 14,762.35 shortly before the close. It proved to be the worst month for both the Dow and the S&P 500 Index (SPX) since May 2012.

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

plus...
    Consumer spending grinds to a halt, General Electric ( GE ) prepares for a change, and Microsoft ( MSFT ) option bulls get creative.

The Dow Jones Industrial Average (DJI - 14,810.31) spent the day in negative territory, and closed with a loss of 30.6 points, or 0.2%, after being down as much as 79 points mere minutes before the closing bell. Ten of the Dow's components moved higher, led by Wal-Mart ( WMT ) and Procter & Gamble (PG), which each gained 0.8%. The 20 laggards were paced by Alcoa (AA), which dropped 1.4% today. This week, the Dow surrendered 1.3%, and the blue-chip index lost 4.4% in August -- its worst month since May 2012.

The S&P 500 Index (SPX - 1,632.97) peeked above breakeven just out of the gate, but also surrendered to selling pressure, closing off 5.2 points, or 0.3%. The Nasdaq Composite (COMP - 3,589.87) tumbled into the close, ultimately giving back 30.4 points, or 0.8%. The SPX and COMP lost 1.8% and 1.9% this week, respectively, and posted monthly losses of 3.1% and 1%.

The CBOE Market Volatility Index (VIX - 17.01) continued yesterday's positive momentum, rising 0.2 point, or 1.2%. This was the fear barometer's first close above 17 since June 26. The VIX gained 21.7% this week and logged a 26.5% jump for the month.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"We've been remarking how well tech and small-caps have held up relative to the Dow, but today was the reverse," noted Detrick. "The Dow hung tough and the more aggressive/higher-beta areas were hit extra hard. In the end, August saw the lightest volume since early 2007, yet it was also the worst month for the Dow since May 2012. Which leaves everyone to ask -- is it a good sign we've had some weakness with no conviction from sellers? Or is this just a harbinger of things to come once the big boys come back in September?"

3 Things to Know About Today's Market :

  • Stocks drifted lower at midday after Secretary of State John Kerry condemned Syrian leaders for the use of chemical weapons, and made a case for why retaliation is justified. Later, President Obama reiterated the potential for a "limited, narrow" engagement that would not require ground troops. (CBS News, USA Today)
  • The rate of personal income growth slowed to a crawl in July, ticking up just 0.1%. Consumer spending rose 0.1% last month as well, falling short of expectations. Meanwhile, August's final reading on consumer sentiment from Thomson Reuters/University of Michigan slipped to 82.1 from 85.1 the previous month, but was higher than the mid-month reading. (Los Angeles Times, Reuters)
  • General Electric ( GE ) wants to exit the lending business, and is looking to spin off its consumer lending operations , GE Capital. The conglomerate has already started working toward an initial public offering of this unit, which has about 55 million customers holding store credit cards. (The Washington Post)

5 Stocks We Were Watching Today :

  1. Our Option Idea of the Week makes a bullish case for Caesars Entertainment Corp (CZR) .
  2. A bullish Microsoft ( MSFT ) trader used three options to bet on long-term upside.
  3. As Facebook (FB) dances near new-annual-high territory, it scored an upgrade from Stifel Nicolaus.
  4. Freeport -McMoRan Copper & Gold (FCX) was targeted by put buyers, who may have been uneasy shareholders in disguise.
  5. Bearish options speculation ramped up on Pfizer Inc. (PFE) , as put buyers eyed the January 2014 series.

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 dipped once again, as fears surrounding military action against Syria eased. The October contract dropped $1.15, or 1.1%, to $107.65 per barrel. On the week, black gold added 1.2%, while rising 2.5% in August (when comparing front-month contracts).

Gold futures lost ground for the third consecutive session, as December-dated futures surrendered $16.80, or 1.2%, to $1,396.10 per ounce. On the week, the malleable metal inched up a fraction of a percent, but tacked on 6.3% during the past month.

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: GE , INTC , MSFT , NAV , WMT

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