Stocks Extend Last-Week's Post-Fed Slide

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"In what is historically a very bearish week -- the week after September options expiration -- the first day started off in the red," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "After the bloodbath on Friday, it was nice to see we didn't have a huge continuation of that. Still, the big worry is that financials are really lagging here, and they could pull the entire market lower, should they continue to underperform." Against this backdrop, the Dow Jones Industrial Average (DJI) closed south of breakeven for the third consecutive session.

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

plus...
    Two Fed officials offered downbeat opinions of the economy, BlackBerry ( BBRY ) received a buyout offer from a Canadian insurance firm, and Nokia ( NOK ) scored some positive analyst attention.

The Dow Jones Industrial Average (DJI - 15,401.38) fell right out of the gate today, sinking to a session low of 15,368.25 just after 11:00 a.m. ET. By the close, the index was off 49.7 points, or 0.3%. The blue-chip bellwether's 11 advancers were led by UnitedHealth Group's ( UNH ) 1.8% gain, while newly minted Dow component Goldman Sachs ( GS ) paced the 19 decliners with a drop of 2.7%.

The S&P 500 Index (SPX - 1,701.84) also dropped at the start of the session, and tagged an intraday low of 1,697.10 this morning. By the end, the index was down 8.1 points, or 0.5%, holding above the key 1,700 level. Meanwhile, the Nasdaq Composite (COMP - 3,765.29) fell 9.4 points, or 0.3%.

Elsewhere, the CBOE Market Volatility Index (VIX - 14.31) spiked after the opening bell, and finished 1.2 points, or 9.1%, higher.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Small-caps held up well on a relative basis, which was one bright spot," continued Detrick. "Historically, the end of September has been weak, and as we head into earnings season in a few weeks, expect to see some choppy price action. The Fed has said what they are going to say, and it is now up to the economy to show some type of a pulse."

3 Things to Know About Today's Market :

  • A pair of Fed officials offered up a lackluster view of the economy today, on the heels of last week's no-taper decision by the central bank. During a speech at Fordham University, New York Fed President William Dudley noted that while the economy is gradually improving, it "still needs the support of a very accommodative monetary policy." Meanwhile, in comments delivered to the Louise Blouin Foundation, Atlanta Fed President Dennis Lockhart said that the economy may have lost its spark. "Is America losing its economic mojo? There is some evidence to the affirmative," he opined. (MarketWatch)
  • The wait is over. BlackBerry ( BBRY ) is being acquired by Canadian-based insurance firm Fairfax Financial in a deal worth $4.7 billion, which values the shares at $9 each. BBRY trading was halted just before the announcement, and then resumed again at 2:00 p.m. EST. Fairfax -- also known as the "Berkshire Hathaway of Canada" -- is the mobile phone maker's biggest shareholder. (CNBC)
  • Markit said its flash purchasing managers index (PMI) arrived at 52.8 this month, compared to an August reading of 53.1 -- marking a decline in U.S. factory activity. Breaking the numbers down further, the employment sub-index dropped to a three-month low of 51.4, versus last month's reading of 53.1. (Reuters)

5 Stocks We Were Watching Today :

  1. Uptrending Nokia ( NOK ) received some bullish brokerage attention at HSBC.
  2. A new multi-year high for Sirius XM Radio (SIRI) didn't deter longer-term option bears.
  3. One pessimistic strategist constructed a long put spread on NVIDIA (NVDA) using November-dated options.
  4. Bearish option activity has accelerated on Marvell Technology Group (MRVL) , despite year-to-date gains.
  5. A near-term put seller wagered on support for Expedia (EXPE) at the $50 mark.

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 dropped for a third straight session, as tensions regarding supplies in the Middle East continue to ease. By the time the dust settled, November-dated oil declined $1.16, or 1.1%, to end at $103.59 per barrel -- the lowest close for a front-month contract since early August.

Meanwhile, gold futures narrowed earlier losses triggered by negative forecasts from Citigroup and Morgan Stanley, thanks to an upbeat manufacturing report out of China. However, the precious metal still closed slightly in the red for the session. Gold for December delivery slipped $5.50, or 0.4%, to finish at $1,327 an ounce.

SCHAEFFER'S MARKET POSTURE



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This article appears in: Investing , Options

Referenced Stocks: AAPL , BBRY , GS , NOK , UNH

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