Markets Drift South as Tapering Concerns Weigh on the Street

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"Following in the footsteps of yesterday's very sluggish action, today was nearly just as slow," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "In the end, stocks finished slightly in the red, but the selling was very muted. It almost feels more like a buyers' strike than anything. Remember the old saying, 'don't short a dull market'? Well, the past two days have been about as dull as it gets." Meanwhile, lingering tapering fears weighed on the Dow Jones Industrial Average (DJI) , which finished south of breakeven.

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

plus...
    Small-business optimism waned in October, the Justice Department approved a merger between AMR Corp. and US Airways Group (NYSE:LCC), and Twitter Inc (NYSE: TWTR ) received some lukewarm analyst attention.

Aside from a few blips higher this morning, the Dow Jones Industrial Average (DJI - 15,750.67) was parked south of breakeven for most of the day, and closed with a loss of 32.4 points, or 0.2%. Merck & Co., Inc. ( MRK ) led the Dow's 13 advancers with a gain of 1.3%, while Travelers Companies Inc's ( TRV ) loss of 1.7% paced the 17 laggards.

The S&P 500 Index (SPX - 1,767.69) spent nearly all of the session in negative territory, and finished 4.2 points, or 0.2%, lower. Meanwhile, the Nasdaq Composite (COMP - 3,919.92) "outperformed" its peers by tacking on 0.1 point.

Elsewhere, the CBOE Volatility Index (VIX - 12.82) jumped higher right out of the gate, and added 0.3 point, or 2.3%, by day's end.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"What can you say, nothing really happened for the second day in a row," mused Detrick. "Bigger picture, we continue to take a breather after the volatility we saw last week. In a way, a little break to catch your breath is nice. Still, remember this is expiration week, and these have a tendency to be a little more volatile than your average week. However, I'm not sure what will move the market a lot, as earnings and the economic calendar are very light over the next three days."

3 Things to Know About Today's Market :

  • During a speech in St. Paul, Minn. today, Minneapolis Fed President Narayana Kocherlakota said financial markets remain bewildered by the latest tapering concerns . The central bank figure noted that a scaling back of the Fed's bond-buying program could hamper the sluggish economic recovery rate, and that such a decision would be influenced by more than just the latest stats. (MarketWatch)
  • The National Federation of Independent Business (NFIB) said its small-business optimism index arrived at 91.6 in October -- a drop of 2.3 points from September's reading of 93.9. This latest figure is one of the first among various economic reports to reflect the impact of the government shutdown last month. (CNBC)
  • AMR Corp. finally received approval from the Justice Deparment to merge with US Airways Group (NYSE:LCC) -- a deal that will create the largest airline globally. Under the settlement terms, both firms will be required to give up slots, gates, and ground facilities in major airports across the U.S. (Barron's)

5 Stocks We Were Watching Today :

  1. Wall Street newcomer Twitter Inc ( TWTR ) received a pair of tepid brokerage initiations ahead of the opening bell.
  2. Google Inc (GOOG) will unveil its low-cost smartphone in Brazil tomorrow, following lackluster sales of its higher-end model.
  3. Near-term option bears converged on DISH Network Corp (DISH) , despite the company's upbeat earnings report.
  4. Southwest Airlines Co. (LUV) touched a multi-year high, prompting a flurry of bullish trading activity in the equity's short-term options pits.
  5. With the holiday season quickly approaching, Apple Inc. (AAPL) debuted its latest -- and pricier -- iPad Mini online today.

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 declined today, amid predictions of larger oil supplies and tapering concerns. By the close, the December contract fell $2.10, or 2.2%, to settle at $93.04 per barrel -- the lowest close for a most active contract since late May.

Meanwhile, gold futures also dropped on Fed anxieties, with December-dated gold lopping off $9.90, or 0.8%, to end at $1,271.20 per ounce. This marked the lowest closing price in more than a month, when comparing most-active contracts.

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: FB , MRK , TRV , TSLA , TWTR

Schaeffer's Investment Research

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