Dow Takes 129-Point Step Back From Previous High

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So much for the rally to 14,000 -- the Dow Jones Industrial Average (DJI) took a major step back today, falling nearly a full percentage point after eclipsing 14,000 for the first time in five years to end last week on a major upswing. The red was all over the board, as only one company in the Dow gained on the day. Disappointing factory order numbers, down markets overseas, and perhaps a Super Bowl hangover all helped get things started off on a downward trend -- and the market never recovered. It was the first 100-point daily drop in more than a month.

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

  • There was a surprise winner in today's market downturn, according to Senior Trading Analyst Bryan Sapp.
  • How short-term bullish option traders zeroed in on online game maker Zynga ( ZNGA ) ahead of earnings.
  • Ford Motor (F), Yahoo! ( YHOO ), and Microsoft ( MSFT ) saw notable attention among option traders today.
plus...
  • The Dow takes a big jump back, factory numbers disappoint, and options traders react to Cisco Systems ( CSCO ), which had been one of the few positive notes on the Dow up until the final minutes of trading.

Spooked by fears in European markets and slower-than-expected growth for factory orders, the Dow Jones Industrial Average (DJI) took a fall from its giddy highs reached at the end of last week. The Dow finished at 13,880.08, losing nearly 130 points, or about 0.9%. Only The Boeing Company ( BA ) advanced, gaining 0.5%. The Travelers Companies (TRV) had the biggest fall out of the 29 decliners, losing nearly 2.4%. It was the first time since Dec. 28 of last year that the Dow dropped more than 100 points.

The S&P 500 Index (SPX) also declined, shedding more than 17 points, or 1.2%, to close at 1,495.71. The index also closed below 1,500 for only the second time in the last seven trading sessions. The Nasdaq Composite (COMP) fell nearly 48 points (1.5%) to finish at 3,131.17.

The CBOE Volatility Index (VIX) rose on all the uncertainty, shooting back above 14 to close at 14.67, up 13.7%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

3 Things to Know About Today's Market :

  • The U.S. Commerce Department reported that factory orders rose by a seasonally adjusted 1.8% in December. Economists had predicted a rise of 2.2% in the month. (The Wall Street Journal)

  • Japan Airlines said it would seek compensation for the nearly $8 million and counting that it has lost due to the ongoing grounding of the Dreamliner 787 manufactured by The Boeing Company ( BA ). Other carriers, including Japan's All Nippon Airways, also have made similar announcements. (Chicago Tribune)

  • The U.S. Justice Department said it will sue ratings company Standard & Poor's (S&P) over what it deems faulty ratings of mortgage bonds ahead of the 2008 financial meltdown. The suit might seek as much as $1 billion in recompense, according to sources. (The New York Times)

5 Stocks We Were Watching Today :

  1. Citrix Systems (CTXS) received an analyst downgrade and then a ton of attention from put traders looking to cash in on the pessimistic news.

  2. Outdoor apparel and boot maker Deckers Outdoor (DECK) saw a big jump in call trading .

  3. Option bears looked to cash in on today's pullback in manufacturing conglomerate General Electric Company (GE).

  4. Strong earnings and technical tailwinds drew longer-term call traders to newspaper giant Gannett Co. (GCI).

  5. IT equipment maker Cisco Systems ( CSCO ) was targeted by call traders today , who looked to cash in on the stock's short-term trend.

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 :

With the dollar rising amid political uncertainty across the Atlantic, oil futures settled lower on the day. The March contract for black gold dipped $1.60, or 1.6%, to close at $96.17 per barrel. On the other hand, investors turned to the "safe haven" of gold as U.S. equities moved lower. April gold futures advanced $5.80, or more than 0.3%, to end the day at $1,676.40 an ounce.

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.

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This article appears in: Investing , Options

Referenced Stocks: BA , CSCO , MSFT , YHOO , ZNGA

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