Topsy-Turvy Session Resolves to the Downside After Fed Minutes

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"Price action was pretty mixed today, with most major sectors and the Dow Jones Industrial Average (DJI) finishing in the red," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Housing starts were a little bit worse than expected, but we really didn't receive too many market-moving economic reports. The Fed minutes were released today and increased the downward momentum for some sectors, especially many of the precious-metals stocks."

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

Plus ... Fed minutes suggest an upbeat outlook, one central bank leader looks ahead to a rate hike, and Tesla Motors Inc ( TSLA ) options players get active ahead of earnings.

The Dow Jones Industrial Average (DJI - 16,040.56) spent a decent chunk of the morning in positive territory, but closed the session near its intraday low, down 89.8 points, or 0.6%. Verizon Communications Inc. ( VZ ) paced the six Dow advancers, rising 1.2%, while JPMorgan Chase & Co. ( JPM ) surrendered 2.1% to bring up the rear.

The S&P 500 Index (SPX - 1,828.75) also lost ground on the day, shedding 12 points, or 0.7%, to complete a bearish outside day. The Nasdaq Composite (COMP - 4,237.95) moved into the red as well, snapping its eight-day winning streak with a drop of 34.8 points, or 0.8%.

The CBOE Volatility Index (VIX - 15.50) sprinted higher amid selling pressure in the broad markets, settling with a gain of 1.6 points, or 11.8%, to close north of 15 for the first time since Feb. 10. With the move, the "fear gauge" edged back above its 10-day moving average.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Taking a step back, many of the indexes have been up eight consecutive days, and price action has been incredibly strong the past couple of weeks," observed Bell. "Despite the dip today, we have quickly erased much of the late-January pullback that shocked so many investors."

5 Items on Our Radar Today :

  1. Minutes from the January meeting of the Federal Open Market Committee (FOMC) revealed that central bank leaders remain hopeful about the U.S. economic recovery. As such, they agreed that a continued tapering of the asset-buying program was warranted. (The New York Times)
  2. In further central bank developments, Atlanta Fed President Dennis Lockhart projected an interest-rate hike in the second half of 2015. He also noted that, barring any massive setbacks on the economic front, "I expect the asset purchase program to be completely wound down by the fourth quarter of this year." (CNBC)
  3. The producer price index (PPI) ticked 0.2% higher last month, due to an increase in the price for finished goods. The Labor Department measure was recently expanded to include services and construction. On a year-over-year basis through January, the PPI rose 1.2%. (Reuters)
  4. A neutral-to-bullish spread trader wagered on limited downside prospects for Apple Inc. (AAPL) over the next couple of months.
  5. Ahead of its Wednesday evening earnings report, Tesla Motors Inc ( TSLA ) earned new lukewarm coverage at FBR and spurred a volatility play in its options pits.

EARNINGS

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 gained ground on Wednesday, ahead of tomorrow's holiday-delayed weekly status update on petroleum supplies. By the close, March crude futures were up 88 cents, or 0.9%, at $103.31 per barrel.

Gold futures couldn't continue their winning streak, and posted their first loss in 10 sessions. April-dated futures declined $4, or 0.3%, to settle at $1,320.40 an ounce, and continued to head lower in after-hours activity following the release of the Fed minutes. The nine-session winning streak was the precious metal's longest since July 2011.

SCHAEFFER'S MARKET POSTURE



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This article appears in: Investing , Options

Referenced Stocks: GRPN , INTC , TSLA , VZ , JPM

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