Tech Stocks Lead Market Into the Red

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"There wasn't a whole lot of major news out today for the market to digest," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT, "but last week's choppy price action continued, with small-caps and technology stocks suffering the brunt of the damage this afternoon. The ongoing Ukraine situation is still hovering over this market, and the momentum from late February has definitely slowed as March draws to a close." The Dow Jones Industrial Average (DJI) started the session in positive territory, but quickly retraced its steps, closing with a modest loss for the day.

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

  • Schaeffer's Trading Analyst Peter Bryans crunches the numbers and asks, " What is sentiment telling us " about the market right now?
  • A massive drugstore chain, a cruise line, and a payroll provider are headed to the earnings confessional this week, and here's how they stack up .
  • Schaeffer's contributor Adam Warner explains why 2014 has been a different trading environment for those in the volatility game.
  • Plus ... The latest on domestic manufacturing activity, a potential new venture for Apple Inc. ( AAPL ) fans, and a battle between the shares of two apparel designers.
Trading Topic of the Week -- Tips for Buying Weekly Options: Buyers should avoid sluggish stocks . Don't use weekly options to bet on a slowly trending blue chip -- you need a fast, aggressive move in the right direction.

The Dow Jones Industrial Average (DJI - 16,276.69) settled slightly lower on the day, despite starting the session in positive territory and peeking above breakeven shortly before the close. By the time the bell sounded, the blue-chip index had given back 26.1 points, or 0.2%. Leading the Dow's 13 advancers was The Procter & Gamble Company ( PG ), up 1.8% today. Meanwhile, lagging its Dow peers was Pfizer Inc. ( PFE ), which paced the declining 17 securities with a drop of 2.1%.

The S&P 500 Index (SPX - 1,857.44) moved modestly lower as well, dropping 9.1 points, or 0.5%, but holding north of technical support. The Nasdaq Composite (COMP - 4,226.38) was the day's underperformer, shedding 50.4 points, or 1.2%.

The CBOE Volatility Index (VIX - 15.09) headed higher from Friday's close at the 15 mark, edging up 0.1 point, or 0.6%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The Dow and the S&P 500 were definitely not as hard hit today as many of the smaller-cap names," continued Bell. "The SPX still hovers just above the 1,850 area, which served as resistance in January and most recently provided a bit of support earlier this month."

5 Items on Our Radar Today :

  1. Financial information company Markit reported its preliminary reading for the March purchasing managers index (PMI) , which pulled back to 55.5 from 57.1 in February. The reading fell south of economists' estimates, but was comfortably north of 50, suggesting expansion in the manufacturing sector. (Reuters via CNBC)
  2. Apple Inc. ( AAPL ) was in the news today, on reports from The Wall Street Journal that the iPad parent is in talks with Comcast Corporation ( CMCSA ) regarding a potential streaming-television service . The new effort would reportedly enable customers to stream on-demand or live broadcasts from the cloud. Amid this news, Apple's weekly call contracts were notably active . (USA Today)
  3. Meanwhile, Netflix, Inc. ( NFLX ) took a tumble on these rumors, causing implied volatility to spike amid increased demand for both calls and puts.
  4. Which apparel designer will win this week's Brand Face-Off -- Ralph Lauren Corp (RL) or VF Corp (VFC) ?
  5. In the wake of a favorable U.S. appeals court ruling, Visa Inc (V) earned a price-target hike.

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

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Oil futures inched higher on Monday, as a shipping channel near Houston closed following a 170,000-gallon oil spill. As investors weighed supply concerns against mixed manufacturing data from China, May-dated crude rose 14 cents, or 0.1%, to settle at $99.60 per barrel.

Gold took a tumble amid persistent concerns that the Federal Reserve will raise interest rates earlier than expected, potentially lifting the dollar. The April gold contract suffered a drop of $24.80, or 1.9%, to settle at $1,311.20 per ounce.

SCHAEFFER'S MARKET POSTURE



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.

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This article appears in: Investing , Options

Referenced Stocks: AAPL , PG , PFE , CMCSA , NFLX

Schaeffer's Investment Research

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