"Stocks were slightly lower after the Fed meeting, but didn't
fall by much until Janet Yellen's question-and-answer session,
during which she dropped the bomb that quantitative easing would be
done by this fall," noted Schaeffer's Senior Technical Strategist
Ryan Detrick, CMT. "Of course, with five meetings to go and $10
billion -$15 billion per tapering announcement, that brings us
right to October. Still, this comment caught many traders off guard
and provided some afternoon fireworks to the downside." The
Dow Jones Industrial Average (DJI)
spent time on both sides of the flat line and traded within a
237-point range before settling 114 points lower.
Trading Topic of the Week
Continue reading for more on today's market, including
-- How to Get Started with Options:
Stick with basic strategies
. Make sure you master the fundamentals before spreading your wings
with iron condors and long butterflies.
Dow Jones Industrial Average (DJI - 16,222.17)
hugged the breakeven line for the majority of the day, before
plunging sharply lower around 3:00 p.m. ET. At its intraday nadir,
the index was off nearly 210 points. By the close, however, it had
bounced back to post a loss of 114 points, or 0.7%. UnitedHealth
Group Inc. (UNH) led the Dow's four advancers today, rising 2.5%,
while The Walt Disney Company (DIS) paced the declining majority,
shedding 1.8%. Cisco Systems, Inc. (CSCO) was unchanged on the
S&P 500 Index (SPX - 1,860.77)
traded in positive and negative territory as well, shedding 11.5
points, or 0.6%, by the close. At its lowest point, the SPX tested
critical support at the 1,850 level. Elsewhere, the
Nasdaq Composite (COMP - 4,307.60)
posted a decline of 25.7 points, or 0.6%.
CBOE Volatility Index (VIX - 15.12)
gained modest ground on the day, advancing 0.6 point, or 4.1%, to
pop back above the 15 mark.
A Trader's Take
"Overall, it was your typical Fed day," quipped Detrick. "We saw
a good deal of volatility and big moves on news. In fact,
historically, Fed days have been strong, but if you look back since
just 2013, more often than not we've seen sell-offs. Then traders
sleep on it and come in the next day, and we bounce."
5 Items on Our Radar Today
- At the first Federal Reserve meeting piloted by new chief
Janet Yellen, there was a
shift in rhetoric
. Marking an update from a lingering promise to leave interest
rates near historical lows, the new language suggested Fed
officials will take several indicators into account when
determining the future of interest rates. In more specific terms,
Yellen theorized that the first interest-rate hike could
come as soon as
mid-2015. Meanwhile, the central bank maintained its tapering
reducing monthly asset purchases
by another $10 billion to $55 billion.
(The Washington Post; AP via ABC News; Forbes)
- FedEx Corporation (FDX) became the latest company to
weak earnings and sales
to harsh winter weather. The shipping giant announced fiscal
third-quarter results that fell short of analysts' expectations,
and lowered its outlook for the full fiscal year.
- Call buying took center stage on
BlackBerry Ltd (BBRY)
today, as speculators wagered on further upside ahead of
Groupon Inc (GRPN)
option writers are banking on a layer of support through the next
- Animation-loving shareholders learned some good news at
The Walt Disney Company's (DIS)
annual meeting yesterday.
For a look at today's options movers and commodities
activity, head to page 2.
Crude oil made modest headway today -- despite news of an
unexpected increase in crude supplies -- to finish above the $100
level. Oil for April delivery added 67 cents, or 0.7%, to close at
$100.37 per barrel.
Gold extended its losing streak to three sessions, with the
April contract shedding $17.70, or 1.3%, to rest at $1,341.30 an
ounce. In after-hours activity, the precious metal continued to
slide, on news of the Fed's continued tapering plans and hints of
an eventual interest-rate hike.