Dow, SPX Test Round-Number Levels In Decidedly Down Day

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"I think the key drivers today were twofold," said Schaeffer's Senior Technical Strategist Ryan Detrick. "First, there were some jitters ahead of Fed Chairman Bernanke's speech tomorrow. The consensus is he probably won't say anything new, which could lead to some disappointment. Secondly, we had some poor economic data out of Europe, further confirming the global slowdown." It was a decidedly down day for the Dow Jones Industrial Average (DJI) , which suffered its worst daily settlement since August 2.

Keep reading to see what else was on our radar today:

And now, a look at the numbers...

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

The Dow Jones Industrial Average (DJI - 13,000.71) was off by more than 128 points at its intraday low of 12,978.91, which also marked the index's first breach of 13,000 in nearly a month. By the time the dust cleared, the Dow closed 106.8 points, or 0.8%, lower, but found round-number support at 13,000. All but two of the 30 blue chips ended in the red today, led by Caterpillar Inc.'s ( CAT ) 1.9% dive. Meanwhile, Merck & Co., Inc. ( MRK ) and The Procter & Gamble Company ( PG ) eked out fractional wins.

The S&P 500 Index (SPX - 1,399.48) gave up its hold on the 1,400 mark for the first time since Aug. 6, tumbling 11 points, or 0.8%, on the day. Similarly, the Nasdaq Composite (COMP - 3,048.71) slipped to its lowest daily perch in two weeks, losing 32.5 points, or 1.1%, by the closing bell.

The CBOE Market Volatility Index (VIX - 17.83) continued higher for a fourth straight session, rising 0.8 point, or 4.5%. Moreover, this is the VIX's loftiest perch since the first day of August.

Today's highlight : "The global economy might be slowing, but the U.S. continues to do rather well on a relative basis," noted Detrick. "Case in point, August same-store-sales were rather strong today. Sure, other parts of the economy are weak, but housing and retail continue to lead us, and that's a nice sign."

Turning to today's major market stories...

For today's activity in commodities, options, and more, head to page 2.

Crude futures parked in negative territory today, on projections that oil production in the Gulf of Mexico will soon return to post-Isaac status. Speculators are also on alert for tomorrow's highly anticipated speech from Federal Reserve Chairman Ben Bernanke. Crude for October delivery fell 87 cents, or 0.9%, to close at $94.62 a barrel.

Likewise, gold futures took a tumble, as hopes flattened that the Fed will implement economic stimulus. By the close, December-dated gold dropped $5.90, or 0.4%, to land at $1,657.10 an ounce.

Levels to watch in trading...

  • Dow Jones Industrial Average (DJI - 13,000.71) - support at 11,500; resistance at 14,000
  • S&P 500 Index (SPX - 1,399.48) - support at 1,100; resistance at 1,500
  • Nasdaq Composite (COMP - 3,048.71) - support at 2,400; resistance at 3,400

OUTPERFORMING AND UNDERPERFORMING SECTORS

STOCKS - MOVERS

STOCKS - EARNINGS

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

SCHAEFFER'S MARKET POSTURE

At the end of every market day, the staff at Schaeffer's Investment Research reviews the trading day in detail, covering major events and key market developments. Don't miss this critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.



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: AOL , CAT , MRK , PG , T

Schaeffer's Investment Research

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