"It was all about Cyprus," said Schaeffer's Senior Equity
Analyst Joe Bell as the
Dow Jones Industrial Average (DJI)
started with a roar on news out of Europe but then crossed into the
red roughly an hour into the trading day. "For such a tiny country,
they sure do know how to grab the headlines. After coming to a
resolution, most sectors responded positively this morning. But
when a European official made comments about how the Cyprus bailout
could be a model for other European countries, markets quickly sold
Continue reading for more on today's market, including
- Schaeffer's Senior Trading Analyst Bryan Sapp on
why the market dropped
even after positive news out of Cyprus; plus, Zions
) is a possible candidate for a short-squeeze rally.
- Schaeffer's contributor Adam Warner on
what higher volume
for the iPath S&P 500 VIX Short Term Futures ETN (VXX) and a
relatively tight range for the CBOE Market Volatility Index
(INDEXCBOE:VIX) means for markets as a whole.
- And how bullish option traders were
by a new downgrade on Research In Motion Ltd (
- The markets start strong but finish weak, a deal in Cyprus
leaves many wondering what's next, and Apple Inc. (
) becomes a target for short-term bulls.
Dow Jones Industrial Average (DJI)
got a bit of good news to start the day with the announcement of
the Cyprus settlement, and even touched a new all-time high of
14,563.75 in early action. But the Dow wound up dropping 64 points,
or 0.4%, to finish at 14,447.75. The 30-member Dow saw only seven
of its members advance, led by Wal-Mart (
), which climbed 0.8%. Bank of America (
) led the 23 decliners by falling 1.3%.
S&P 500 Index (SPX)
also fell, giving back 5 points, or 0.3%, to close at 1,551.69 --
but not before setting a new five-year high of 1,564.91 and coming
within just a few points of a new all-time peak. The
Nasdaq Composite (COMP)
finished at 3,235.30, down 9.7 points, or 0.3%.
CBOE Market Volatility Index (VIX)
gained 0.2 point, or 1.3%, to close at 13.74.
A Trader's Take
"If you like defensive sectors, you probably loved today's
action," Bell said. "With almost every major sector in the red,
defensive names were the place to be this afternoon."
3 Things to Know About Today's Market
a $13 billion bailout deal with the European Union, but the
long-term implications for the country and the European economy
still remain unclear.
(The Washington Post)
- Federal Reserve Chairman Ben Bernanke said today in London
that the central bank's current bond-buying program is aimed to
stimulate the U.S. economy and
is not a way
to devalue the dollar and create international competition.
- The Dell (DELL) buyout saga
with another twist today, as two more bids were received from
groups led by activist investor Carl Icahn as well as the
Blackstone Group -- and both could be more than the one proposed
by company founder and CEO Michael Dell.
5 Stocks We Were Watching Today
- Apple (
) rose on the charts, leading option traders
that the upswing would continue through the end of the week.
- Option bears were looking for
to continue slowing down United Continental Holdings (UAL).
- eBay (EBAY) fell today, but that didn't stop traders from
a short-term rise for the online auctioneer.
- A barrage of good news for Facebook (FB) led to
a big bunch
of back-month call trades.
- Videogame retailer GameStop (GME) drew
ahead of its earnings this week.
For a look at today's options movers and commodities
activity, head to page 2.
Oil futures enjoyed their highest close in more than a month,
with news of the Cyprus deal allaying concerns about overseas
demand. May-dated oil finished at $94.81 per barrel, up $1.10, or
April gold dropped $1.60, or 0.1%, to close at $1,604.50 on a
see-saw day that included an early sell off that was followed later
by a rally that allowed the precious metal to retake the
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
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