Remarks by Fed Official Send Dow into Negative Territory

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"There was some strong overseas economic data out of China and Great Britain, but the major U.S. indices failed to respond today," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "In addition, a Fed official came out and said the market could expect a slowdown in asset purchases later this year, if the economy continues to improve." As a result, the Dow Jones Industrial Average (DJI) ended up finishing the session in the red.

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

plus...
    The ISM's non-manufacturing index hit a multi-month high, a Fed hawk sparked tapering concerns, and Cisco Systems ( CSCO ) reached a new technical milestone.

The Dow Jones Industrial Average (DJI - 15,612.13) was docked in negative territory for the entire session -- hitting an intraday low of 15,584.83 during the morning hours of trading -- but managed to recover some of its losses to close 46.2 points, or 0.3%, lower. The blue-chip barometer's 10 advancers were led by UnitedHealth Group's (UNH) 1.5% gain, while United Technologies (UTX) paced the 20 decliners with a loss of 1.1%.

The S&P 500 Index (SPX - 1,707.14) also took a hit today, and finished the session with a drop of 2.5 points, or 0.2%. Meanwhile, the Nasdaq Composite (COMP - 3,692.95) "outperformed" its peers by once again tagging a 12-year intraday high of 3,694.19, and advancing 3.4 points, or 0.1%.

The CBOE Market Volatility Index (VIX - 11.84) shot up to an intraday high of 12.42 within the first half-hour of the session, but lost its momentum to finish 0.1 point, or 1.2%, lower.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The markets were greeted by a very strong ISM non-manufacturing index reading, but most of the major sectors were unable to muster much of a gain," Bell continued. "We did see technology, consumer staples, and telecom services lead the way, though."

3 Things to Know About Today's Market :

  • The Institute for Supply Management (ISM) said its non-manufacturing index arrived at 56.0 in July -- up from the previous month's reading of 52.2, and exceeding the consensus view. The latest figure also marked the index's highest level since February. (The Washington Post)
  • Federal Reserve Bank of Dallas President Richard Fisher threw some cold water on stocks today, noting that the latest round of employment news could mean a tapering to QE3 efforts is on the way. Fisher is not currently a voting member of the Federal Open Market Committee, but has historically been a critic of stimulus measures. (MarketWatch)
  • Optimism among the investing public is waning, according to TD Ameritrade (AMTD). The brokerage firm revealed that its Investor Movement Index fell to 4.87 last month from June's reading of 5.15, reflecting a decrease in bullish sentiment among retail investors. (CNBC)

5 Stocks We Were Watching Today :

  1. American International Group (AIG) received a price-target hike at KBW, on the heels of last week's well-received quarterly earnings report.
  2. Longer-term bulls flocked to Canadian Solar (CSIQ) , as the stock touched a new two-year peak.
  3. Rumors of leaked Z15 device images caused BlackBerry (BBRY) to spike higher, attracting weekly call players.
  4. Micron Technology (MU) was targeted by call sellers and put buyers, despite today's positive price action.
  5. A pair of upbeat brokerage notes pushed Cisco Systems ( CSCO ) to a fresh multi-year high.

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 finished the session in the red, following news that Libya will resume some of its oil production, as well as today's stronger-than-anticipated ISM data. By the time the closing bell rang, September-dated crude was off 38 cents, or 0.4%, to end at $106.56 per barrel.

Meanwhile, gold futures extended Friday's decline, after Dallas Fed President Richard Fisher opined that the Fed could be closer to tapering its bond-buying program. The December-dated contract fell $8.10, or 0.6%, to finish at $1,302.40 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: AOL , CSCO , FB , RHT , TSLA

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