"Although today may have seemed like a typical profit-taking
day, there was continued apprehension following last week's news of
the first corporate bond default in China, as well as the continued
drop in copper," noted Schaeffer's Senior Equity Analyst Joe Bell,
CMT. "There appear to be a decent number of market participants
looking to take some positions off the table." After closing Monday
with a minor loss, the
Dow Jones Industrial Average (DJI)
moved lower again today, and other major indexes followed suit.
Continue reading for more on today's market, including
Trading Topic of the Week
- Schaeffer's Trading Analyst Peter Bryans shares
six charts that illustrate
current market technicals.
- The latest development in the merger dance between Jos. A.
Bank Clothiers Inc (
) and The Men's Wearhouse, Inc. (
plenty of activity
in the retailers' options pits.
in case you missed it
, contributor Adam Warner reflects back on the
five-year bull run
we've seen since the market bottomed on March 9, 2009.
... Wholesale inventories data surprises the Street, Apple Inc. (
) traders focus on the short term, and Starbucks Corporation (
) suffers an early morning blow.
-- How to Interpret Short Interest:
Weigh the short interest ratio
. This handy little indicator tells you approximately how much
future buying power is pent up among the short-selling crowd.
Dow Jones Industrial Average (DJI - 16,351.25)
spent some time in positive territory this morning, but sellers
took control by midday, sending the blue-chip index decidedly into
the red. By the close, the Dow was off 67.4 points, or 0.4%. Ten of
the Dow's 30 components finished higher on the day, with McDonald's
) leading the pack, up 3.8%. Pacing the 20 decliners was Goldman
Sachs Group Inc (GS), which declined 2.1%.
S&P 500 Index (SPX - 1,867.63)
followed a similar path on the day, and closed near its intraday
low, off 9.5 points, or 0.5%. The
Nasdaq Composite (COMP - 4,307.19)
shed 27.3 points, or 0.6%, to finish the day south of its 10-day
CBOE Volatility Index (VIX - 14.80)
muscled higher amid the weakness in stocks. By the closing bell,
the "fear barometer" had gained 0.6 point, or 4.2%.
A Trader's Take
"We continue to see uncertainty surrounding Ukraine, although
markets seem to be taking the focus off the situation for the time
being," added Bell. "After a strong rally during the past few
weeks, today's action should not have been a big surprise. In a
logical rotation, buyers were putting a little more money into gold
and bonds today as well."
5 Items on Our Radar Today
- Wholesale inventories
in January, rising by 0.6%, which was more than expected. Sales
at wholesalers slid 1.9% during the month, however, the largest
decline since March 2009. Economists were expecting sales to edge
- After months of escalating buyout offers, Jos. A. Bank
Clothiers Inc (
) and The Men's Wearhouse, Inc. (
have finally come to an agreement
, where the latter will buy the former for $1.8 billion ($65 per
share). Where does this leave Eddie Bauer, which JOSB agreed to
purchase last month? Probably out in the cold, but collecting a
termination fee of up to $48 million.
- On the heels of touching a new year-plus high,
Zynga Inc (ZNGA)
was targeted by short-term call buyers.
Apple Inc. (
traders eyed soon-to-expire calls and puts, placing wagers on the
stock's near-term outlook.
Starbucks Corporation (
was hit with a price-target reduction this morning (and could
soon endure additional negative brokerage attention).
For a look at today's options movers and commodities
activity, head to page 2.
Continued concerns about China's economy sent crude futures
lower today. By the close, April-dated futures had dropped $1.09,
or 1.1%, to $100.03 per barrel. This marked the lowest settlement
price for a most-active contract in a month.
Gold futures, however, moved higher in Tuesday's trading, as
investors were attracted to the precious metal's safe-haven appeal.
The April contract rose $5.20, or 0.4%, to close at $1,346.70 per
ounce. High-grade copper, meanwhile, continued Monday's retreat,
with May-dated futures shedding 8 cents, or 2.6%, to $2.95 per