Stocks Pressured Lower, Dow Closes Below 16,000


"We had a little bit of economic data released this morning, but overall these reports did little to move the market one way or the other," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Most major sectors were met with early selling, but by the end of the day, some participants bought the dip once again, and we finished off the intraday lows." After dancing around the 16,000 level for much of the session, the Dow Jones Industrial Average (DJI) ended back south of this millennium mark.

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

    Budget talks reach fever pitch, the Volcker Rule gets federal clearance, and Twitter Inc ( TWTR ) options get pricier.

The Dow Jones Industrial Average (DJI - 15,973.13) traded below the breakeven level for nearly all of the session once again, closing down 52.4 points, or 0.3%. Seven of the 30 Dow names finished higher, led by Goldman Sachs Group Inc ( GS ), which added 1.2%. Microsoft Corporation (MSFT) paced the 23 decliners with its 1.5% loss.

The S&P 500 Index (SPX - 1,802.62) also fell, shedding 5.8 points, or 0.3%. Unlike the Dow, however, the SPX maintained its hold above its own round-number level -- 1,800. The Nasdaq Composite (COMP - 4,060.49) slipped 8.3 points, or 0.2%, on the day.

The CBOE Volatility Index (VIX - 13.91) hit an intraday high of 14.22 before closing up 0.4 point, or 3.1%.



A Trader's Take :

"Despite the overall broad-market weakness, there were pockets of strength today," Bell added. "It seemed like many of the momentum names and high-flyers disconnected themselves from the major indices and finished with some decent gains. Solar energy companies, basic materials, and gold miners were all among the notable outperformers."

3 Things to Know About Today's Market :

  • Budget negotiations heated up in Washington, as lawmakers face a Friday deadline to sidestep another government shutdown on Jan. 15. Leaders from both sides of the aisle are in talks to reach a two-year deal that sources indicate could include the deferral of some automatic spending cuts. (Reuters, via CNBC)
  • Five federal agencies unanimously approved implementation of the Volcker Rule , which prevents financial institutions from most types of proprietary trading activities. In response, President Barack Obama noted, "our financial system will be safer and the American people are more secure" with the rule in place. (MarketWatch)
  • Mary Barra will become the next chief executive officer for General Motors Company ( GM ), replacing outgoing CEO Dan Akerson in mid-January. Barra will be the first female head of a major automaker. (CNNMoney)

5 Stocks We Were Watching Today :

  1. Facebook Inc (FB) retook the $50 level and was flooded by bullish options traders.
  2. Advanced Micro Devices, Inc. (AMD) attracted a slew of option bulls ... or were they short sellers looking to hedge?
  3. Twitter Inc ( TWTR ) option prices are rising, but that hasn't stopped speculators from trading them.
  4. Good news from a late-stage clinical trial sent call speculators into the AbbVie Inc (ABBV) option pits.
  5. One wonders why controversial Abercrombie & Fitch Co. (ANF) Chairman and CEO Michael S. Jeffries was offered an extension on his contract.


For a look at today's options movers and commodities activity, head to page 2.



Commodities :

Crude futures accelerated to their highest close since late October, amid expectations that weekly reports will reveal a further decline in crude supplies. By the close, January-dated futures had added $1.17, or 1.2%, to end at $98.51 per barrel.

Gold futures also rose, notching a three-week high as traders continued to speculate about when the Federal Reserve will begin tapering its current asset-buying efforts. The precious metal's February contract added $26.90, or 2.2%, settling at $1,261.10 an ounce.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing , Options

Referenced Stocks: AAPL , GERN , GM , GS , TWTR

Schaeffer's Investment Research

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