"The big news started last night, when Cisco Systems (
) issued cautious guidance, and announced it would be cutting 5% of
its workforce," said Schaeffer's Senior Equity Analyst Joe Bell,
CMT. "Combine that with Wal-Mart's (
) sluggish view on consumer spending, and many market participants
were quick to sell anything and everything in their portfolio. All
major sectors finished deep in the red, as investors looked to
unload many of their positions after the past few weeks of sideways
price action came to an end." Against this grim backdrop, the
Dow Jones Industrial Average (DJI)
closed at its lowest level since July 3.
Continue reading for more on today's market, including
Weekly jobless claims fell to a multi-year low, Wal-Mart's (
) quarterly revenue results disappointed Wall Street, and investor
news triggered a price-target hike for Apple (AAPL).
Dow Jones Industrial Average (DJI - 15,112.19)
tumbled right out of the gate and remained deep in the red for the
rest of the session. By the close, the index lost 225.5 points, or
1.5% -- finishing just slightly north of its intraday low of
15,094.03 and below its 80-day moving average for the first time
since late June. Caterpillar (CAT) was the sole advancing blue-chip
with its gain of 0.1%, while Cisco Systems (
) paced the 28 decliners with an earnings-induced loss of 7.2%.
Alcoa (AA) remained unchanged.
S&P 500 Index (SPX - 1,661.32)
didn't fare much better, and shed 24.1 points, or 1.4% -- its
lowest daily close since July 10. Meanwhile, the
Nasdaq Composite (COMP - 3,606.12)
lopped off 63.2 points, or 1.7%.
CBOE Market Volatility Index (VIX - 14.73)
experienced some see-saw movement today, but finished the session
1.7 points, or nearly 13%, higher -- its first daily close above 14
since mid-July. The "fear barometer" is now on pace to end the week
atop its 20-week moving average for the first time in more than a
A Trader's Take
"There was quite a bit of economic data out today, and it wasn't
all bad," Bell went on. "Initial jobless claims were actually
better-than-expected, and came in at their lowest level since
October 2007. Treasury yields once again jumped to new highs, with
some believing this improvement could bring tapering sooner rather
3 Things to Know About Today's Market
First-time jobless claims
fell by a larger-than-anticipated 15,000 last week to 320,000,
according to the Labor Department, marking the reading's lowest
level since the fall of 2007. Meanwhile, the four-week moving
average for initial unemployment filings dropped by 4,000 to
332,000, also notching a multi-year low.
- The Labor Department also noted that its
consumer price index (CPI)
climbed by 0.2% in July, falling in line with the consensus view.
On a year-over-year basis, the CPI gained 2%, its biggest
increase since February. Excluding food and energy costs, prices
still advanced by 0.2%.
- Wal-Mart (
) reported an
adjusted fiscal second-quarter profit
of $4.07 billion, or $1.25 per share, on revenue of $116.2
billion. While the former matched bottom-line estimates, the
latter fell short of analysts' projections for $118.47 billion in
sales. The retailer is now forecasting a 2-3% increase in
full-year revenue, compared to its earlier expectations for a
rise of 5-6%.
5 Stocks We Were Watching Today
- Analysts at RBC upped their price target for
following some investor-related news.
- Short- and longer-term bulls swarmed
on the heels of a management shake-up.
Cisco Systems (
was hit with a trio of price-target cuts after announcing plans
to reduce its workforce.
- Call volume ran unusually high on
Applied Materials (AMAT)
ahead of tonight's quarterly earnings report.
- Bearish speculators wagered on extended losses for
by October expiration.
For a look at today's options movers and commodities
activity, head to page 2.
Crude oil futures advanced for a fifth consecutive session, as
unrest in Egypt sparked supply concerns. By day's end,
September-dated oil added 48 cents, or 0.5%, to finish at $107.33
per barrel -- the contract's highest close in two weeks.
Meanwhile, gold futures surged today, as investors sought
comfort in the safe-haven metal amid the sharp broad-market drop.
The December-dated contract gained $27.50, or 2%, to end at
$1,360.90 an ounce.
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