"The uncertainty from Washington continues to drag on this
market," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT.
"With each passing day, investors are becoming more and more
frustrated with the lack of clarity, and there seems to be an
increasing fear that this could snowball into something bigger. The
debt ceiling deadline is also looming over the market and until we
get some solutions, many participants just don't want to put a lot
of money to work." As the weekend failed to bring any answers, the
Dow Jones Industrial Average (DJI)
gapped lower out of the gate and closed solidly in the red.
Continue reading for more on today's market, including
Economic experts offer debt ceiling predictions, the Fed
releases consumer credit data, and Facebook (
) option bulls stay active.
Dow Jones Industrial Average (DJI - 14,936.24)
moved sharply lower right out of the gate, and couldn't muster much
of a recovery throughout the session, settling with a loss of 136.3
points, or 0.9%. After retaking the 15,000 level on Friday, the
blue-chip index flirted with the millennium mark for much of the
session before relinquishing control. Just three Dow stocks managed
to close higher, led by AT&T (
), which added 0.7%. The 27 decliners were paced by Visa's (
) 2.2% drop.
S&P 500 Index (SPX - 1,676.12)
also fell, dropping 14.4 points, or 0.9%, on the day, but closing
north of its 80-day moving average. The
Nasdaq Composite (COMP - 3,770.38)
followed suit, surrendering 37.4 points, or 1%.
Against this backdrop, the
CBOE Market Volatility Index (VIX - 19.41)
surged to its highest close since late June, adding 2.7 points, or
16%, to close at its intraday peak.
A Trader's Take
"Despite the negative tone out of Washington, the S&P 500
Index (SPX) and Russell 2000 Index (RUT) seem to remain in a period
of consolidation," observed Bell. "In addition, earnings season is
set to start this month and expectations once again seem to be
3 Things to Know About Today's Market
- Raymond McDaniel, CEO of credit rating agency Moody's, tried
to calm increased concerns about the unproductive budget
it is "extremely unlikely"
that the government will default on its payments. Taking the more
panicked side of the argument, U.S. Treasury Secretary Jack Lew
warned that the U.S. is nearing a scenario of "not having cash to
pay [its] bills." The nation's borrowing limit, or debt ceiling,
is scheduled to max out next Thursday, Oct. 17.
- The Federal Reserve reported that
total consumer borrowing
rose by $13.6 billion in August, exceeding economists' estimates.
Non-revolving credit (such as auto loans and student loans)
climbed $14.5 billion, while revolving credit (mostly credit-card
use) declined $883 million, marking the reading's third straight
- BlackBerry (
) came back into focus today, as a number of tech giants --
including Google (GOOG), Cisco Systems (CSCO), and Samsung --
introduced as possible suitors
to buy all or part of the smartphone maker. These offers, if
valid, would be considered as alternatives to Fairfax Financial's
standing $4.7 billion offer to take BBRY private.
5 Stocks We Were Watching Today
- Options traders have turned bearish on
Micron Technology (MU)
ahead of the semiconductor concern's turn in the earnings
confessional later this week.
- Bullish spread buyers continued to target new all-time highs
Apple Inc. (AAPL)
earned an upgrade and a price-target hike ahead of today's
J.C. Penney (JCP)
hit another three-decade low but saw additional bullish options
strategies at work.
Chesapeake Energy (CHK)
-- a notable outperformer on the charts -- was targeted by
long-term put buyers.
For a look at today's options movers and commodities
activity, head to page 2.
Oil futures ended in the red once again, as tropical-storm
concerns diminished over the weekend. November-dated oil futures
logged a drop of 81 cents, or 0.8%, to settle the day at $103.03
Gold futures, however, rebounded higher after two consecutive
losses, capturing some safe-haven appeal as the government shutdown
persisted. By the closing bell, December gold futures had gained
$15.20, or 1.2%, to close at $1,325.10 per ounce.
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