"There wasn't much market-moving news today," noted Schaeffer's
Senior Equity Analyst Joe Bell, CMT, "but the S&P 500 Index
(SPX) kept battling with the top of its recent trading range, and
small-caps continued to underperform. One theme that played out
today was the strength in the yen, which negatively affects those
invested in the yen carry trade, and is another source of selling
for this market." By the close, the
Dow Jones Industrial Average (DJI)
had suffered a triple-digit pullback, bringing it solidly into
losing territory for the week.
Trading Topic of the Week
Continue reading for more on today's market, including
-- Ways to Win with Aggressive Trades:
Don't invest in intrinsic value
. If you're expecting a drastic pop or drop in the stock, why not
juice your returns even further by capitalizing on the greater
leverage of at-the-money options?
Dow Jones Industrial Average (DJI - 16,401.02)
suffered a broad-based loss and ended just shy of its intraday
nadir, off 129.5 points, or 0.8%. Pacing the Dow's 27 declining
names was Merck & Co., Inc. (
), which surrendered 2.6%
following the sale
of its consumer-products division. Leading the index's trio of
advancers was Verizon Communications Inc. (VZ), up 0.2% on the
S&P 500 Index (SPX - 1,867.72)
pulled below the widely cited 1,880 level to close down 16.9
points, or 0.9%, to settle at its low-water point of the day. The
Nasdaq Composite (COMP - 4,080.76)
was the day's underperformer, shedding 57.3 points, or 1.4%, by the
closing bell, and also settling at its intraday low.
CBOE Volatility Index (VIX - 13.80)
spent nearly all of the session above the breakeven line as it
marched toward the 14 level. By the close, the market's "fear
gauge" had added 0.5 point, or 3.8%.
A Trader's Take
"Today's market action was really more of the same," continued
Bell. "We have struggled to enter any sort of trend during the past
several weeks, and technology and small-caps continue their battle
to stay afloat. With utilities and bonds remaining strong, it is
clear investors are rotating money into the more defensive asset
classes ahead of the summer."
5 Items on Our Radar Today
- Both exports and imports rose in March, resulting in a 3.6%
drop in the trade gap
, to $40.4 billion from a downwardly revised $41.9 billion in
February. The reading was just a hair north of economists'
- TWTR took a toll on the tech sector today, after a
, making almost 500 million shares eligible for sale by company
insiders. A sell-off ensued, sending the shares to their lowest
point on record, or $31.72. By the day's end, TWTR had suffered a
17.8% loss to $31.85.
Yahoo! Inc. (
call options flew off the shelves in anticipation of the Alibaba
AOL, Inc. (AOL) and Keurig Green Mountain Inc
are among the names with earnings reports scheduled for
Groupon Inc (
weekly options buyers expressed optimism ahead of the company's
turn in the earnings confessional tonight.
For a look at today's options movers and commodities
activity, head to page 2.
June-dated crude futures peeked above the century mark in
intraday trading, but ultimately pared their gain to 2 cents to end
at $99.50 per barrel. Elsewhere, natural gas for June delivery
soared 2.4% to $4.80 per million British thermal units, after the
Energy Information Administration upped its price forecasts for
2014 and 2015.
Gold futures backpedaled from a three-week peak, despite
escalating violence in Ukraine. By the close, the June contract
gave up 70 cents, or 0.1%, to finish at $1,308.60 an ounce.
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