Fed Anxieties Send Dow Jones Industrial Average to Multi-Week Low

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U.S. stocks were again negatively impacted by ambiguity surrounding the Federal Reserve's eventual tapering of its bond-buying efforts. The Dow Jones Industrial Average (DJI) trended lower for most of the session, closing not far from its intraday nadir and south of the 15,400 mark for the first time in more than a month. It was also the blue-chip index's first triple-digit drop since June 28.

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

plus...
    The producer price index remained flat in July, a Fed official fretted over low inflation levels, and put buyers continued to pummel Nokia ( NOK ).

The Dow Jones Industrial Average (DJI - 15,337.66) was trapped in negative territory for most of the session, touching an intraday low of 15,316.62 in the early afternoon hours of trading. By the close, the blue-chip bellwether was down 113.4 points, or 0.7% -- its lowest daily close since July 10. Bank of America ( BAC ) led the eight advancers with a gain of 0.6%, while Home Depot ( HD ) and Johnson & Johnson (JNJ) each lost 2.5%, pacing the 22 laggards.

Similarly, the S&P 500 Index (SPX - 1,685.39) spent the majority of the day in the red, declining 8.8 points, or 0.5%, by the closing bell. Meanwhile, the Nasdaq Composite (COMP - 3,669.27) shed 15.2 points, or 0.4%.


The CBOE Market Volatility Index (VIX - 13.04) dropped to a session low of 12.35 right out of the gate, but ended up adding 0.7 point, or 5.9%, on the day.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"One key driver behind today's session was continued selling pressure in the housing sector, which dragged down much of the broader market," noted Venosa. "One silver lining, though, was the outperformance seen in some of the beaten-down commodity industries such as gold, silver, and coal stocks."

3 Things to Know About Today's Market :

  • James Bullard was the latest Fed official to weigh in on the central bank's current stimulus measures. During a speech delivered in Paducah, Ky., the St. Louis Fed president said he is concerned about low inflation levels , which he added will be a factor in whether the Fed will scale back its bond-buying program. "There has not been much indication, so far, that it has been ticking back up toward target," he noted. (Reuters)
  • The Labor Department said its producer price index (PPI) remained flat in July, surprising economists who were expecting a rise of 0.3%. Meanwhile, core prices, which exclude food and energy costs, edged 0.1% higher -- less than the 0.2% climb projected by economists. By comparison, June saw gains of 0.8% and 0.2%, respectively. (MarketWatch)
  • Two ex-employees from JPMorgan Chase (JPM) are facing criminal charges regarding the "London Whale" trading scandal . Julien Grout and Javier Martin-Artajo are the first to be charged with wire fraud and falsifying books and records to hide the banking concern's multi-billion dollar trading losses. Each could face up to 25 years in prison, and incur up to $250,000 in fines. (CNBC)

5 Stocks We Were Watching Today :

  1. Front-month put buyers were unfazed by Pandora Media's (P) fresh two-year high.
  2. Nokia ( NOK ) continued to attract bearish traders, who predicted near-term losses for the stock.
  3. Recent headlines for BlackBerry (BBRY) triggered a flurry of short-term options activity.
  4. Advanced Micro Devices (AMD) saw a surge in August call volume amid today's positive price action.
  5. Optimistic speculators wagered on a new multi-year high for Sirius XM Radio (SIRI) by October.

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 reversed their morning losses, after the Energy Information Administration reported a larger-than-expected drop in crude inventories last week. By the time the dust settled, September-dated oil tacked on 2 cents to close at $106.85 per barrel.

Meanwhile, gold futures rebounded after snapping a four-day winning streak yesterday. The December-dated contract gained $12.90, or 1%, to end at $1,333.40 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: AAPL , BAC , HD , NOK , PCLN

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