Italy Concerns Get Dow's Week Off to Rough Start


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"As reports surfaced that the Italian election result was still uncertain, many markets around the world reacted with selling," said Schaeffer's Senior Equity Analyst Joe Bell on a day that saw the Dow Jones Industrial Average jump fast out of the gate but limp into a loss at the finish on a wild day with a nearly 300-point swing. "U.S. equities followed suit, as the Dow Jones continues to battle with the round-number 14,000 area."

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

  • The eight reasons our Senior Options Strategist Tony Venosa, CMT, gives for considering Symantec Corporation ( SYMC ) for a long-term long trade.
  • Our Senior Trading Analyst Bryan Sapp on how today's Italian elections moved the markets lower ; plus why Suncor Energy ( SU ) could be poised for more downward movement.
  • A look at 25 stocks on the mend , including Netflix ( NFLX ), Deere & Company ( DE ) and ( AMZN ).
  • The markets move back into the red to start the week, more gridlock and posturing in Washington over the so-called "sequester," and how the bulls looked to cash in on another rise from online gaming company Zynga (ZNGA).

The Dow Jones Industrial Average started off strong, crossing over the 14,000 barrier and hitting another new multi-year high of 14,081.58 early in the morning, but then got punched down by uncertainty over the state of the Italian economy as that country goes through elections. The 297-plus point swing the index experienced was the largest since the first trading day of the year. The Dow finished down 216 points, or 1.6%, to close at 13.784.17. Only three of the 30 companies on the Dow advanced, led by McDonald's (MCD), which climbed 0.9%. The 27 decliners were led by Bank of America (BAC), which fell 3.6%.

The S&P 500 Index (SPX) also fell, shedding nearly 28 points, or 1.8%, to close at 1,487.85 -- breaking a string of 13 consecutive sessions the SPX had finished above the round-number barrier of 1,500. The Nasdaq Composite (COMP) fell nearly 46 points, or 1.4%, to finish at 3,116.25.

All the uncertainty was good for the CBOE Volatility Index (VIX) , which soared 4.9 points, or 33.9%, to close at 18.99. It was the highest close for the VIX so far this year.



A Trader's Take :

" There wasn't a whole lot to cheer about today, as small- and mid-cap stocks led the way down," Bell said. "As earnings season winds down, we have some housing data and February Consumer Confidence set to be released tomorrow (Tuesday). We are also one day closer to the March 1 spending cut deadline, which should become a bigger headline with each passing day."

3 Things to Know About Today's Market :

  • The stalemate between the White House and Congress over the automatic federal spending cuts known as the "sequester" set to go into effect Friday continued, with President Obama trying to get the nation's governors onto his side . (USA Today)
  • The U.S. government has begun to unload its remaining stake of General Motors (GM), selling $156.4 million worth of the Detroit automaker's stock in January as part of its efforts to recoup the $20 billion left outstanding from its $49.5 billion bailout of GM in 2008. (CBS News)
  • Barnes & Noble (BKS) saw its stock skyrocket after the company's chairman announced he wanted to bid for the retail side of the bookstore chain. (The New York Times)

5 Stocks We Were Watching Today :

  1. Zynga (ZNGA) had a strong open to today's session, which lured in bulls looking for even more improvement from the online gaming firm over the next three weeks.
  2. SanDisk Corporation (SNDK) saw a flurry of short-term bullish call buyers looking to cash in on the stock's recent run.
  3. VMware (VMW) was the target of front-month call traders who were perhaps seeking to protect their current positions.
  4. Bearish traders swooped in on Eli Lilly (LLY) despite the stock's upward technical trends.
  5. Short-term bearish investors also looked for Molycorp Inc (MCP) to drop following its earnings later this week.


For a look at today's options movers and commodities activity, head to page 2.



Commodities :

The stronger U.S. dollar continues to wreak havoc on commodity markets, with oil futures falling again on Monday. Crude for April delivery closed on a decline of just 2 cents, or 0.02%, at $93.11 per barrel.

But the recent declines in gold attracted bargain hunters -- the precious metal's April futures gained $13.80, or 0.9%, to finish at $1,586.60 per ounce.


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 Nasdaq, Inc.

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This article appears in: Investing Options
Referenced Stocks: AMZN , DE , NFLX , SU , SYMC

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