Ukraine Concerns Overshadow Data, Earnings; Stocks Drop


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"Concerns over Ukraine and Russia came back strong, and were cited as the reason for today's big drop," reported Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. ", Inc. ( AMZN ) didn't help, as its outlook left a lot to be desired. Bigger picture, the chop continues. Coming into this week, the S&P 500 Index (SPX) -- in terms of its weekly price action -- was up/down/up/down/up/down/up ... and finished moderately down today. The reality is the high-flying momentum names continue to drop significantly, while most other stocks keep chopping around in a very frustrating fashion." Meanwhile, the Dow Jones Industrial Average (DJI) was down nearly 170 points at its intraday nadir, and finished 140 points lower, ending the week in negative territory.

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

  • Why last-minute traders were stocking up on Tesla Motors Inc ( TSLA ) options bets .
  • was greeted with a slew of negative brokerage attention following its quarterly earnings report.
  • One options strategy you need to know: the long call spread , and how one Atlas Energy LP ( ATLS ) bull placed a $2.3 million bet.
  • Plus ... Standard & Poor's weighs in on Russia, consumer sentiment heads higher, and Advanced Micro Devices, Inc. ( AMD ) put sellers wager on support.
Trading Topic of the Week -- 5 Reasons to Dodge Directional Risk: Reduce your reliance on stop-losses . With straddles, your dual directional exposure means you won't suffer major initial losses due to market volatility or adverse price movement.

The Dow Jones Industrial Average (DJI - 16,361.46) spent Friday in the red, hitting its lowest point in mid-afternoon trading before closing with a 140.2 point, or 0.9%, drop. For the week, the blue-chip index lost 0.3%. Eight Dow names managed to gain ground today, led by McDonald's Corporation ( MCD ), which rose 0.9%. Pacing the declining majority was Visa Inc (V), which dropped 5% amid concerns that sanctions against Russia could impact the credit card giant's bottom line.

The S&P 500 Index (SPX - 1,863.40) also fell, losing 15.2 points, or 0.8%, on the day, and closing the week off less than 0.1%. The Nasdaq Composite (COMP - 4,075.56) fared the worst of its index peers, shedding 72.8 points, or 1.8%, to bring its weekly deficit to 0.5%.

The CBOE Volatility Index (VIX - 14.06) closed back above the 14 level for the first time since April 16, rising 0.7 point, or 5.6%, on the day. This week, the market's "fear gauge" added 5.2%.



A Trader's Take :

"The reality is, next week is still earnings season, but all of that can quickly take a backseat to what is happening in Ukraine and Russia," noted Detrick. "Earnings season has been impressive thus far, but there's an old saying that 'news trumps charts,' and news out of Russia could create a good deal of volatility by the time we get back to our desks Monday morning. Fasten your seat belts."

5 Items on Our Radar Today :

  1. The escalating conflict surrounding Ukraine's borders took center stage once again, sending stocks lower around the globe. President Barack Obama announced plans to gather European leaders to discuss the situation (and possibly weigh additional sanctions). Standard & Poor's, meanwhile, downgraded Russia's debt rating to one mere step above "junk" status, and the country's central bank weighed in by hiking its interest rate. (Yahoo! News)
  2. Thomson Reuters/University of Michigan's final reading on consumer sentiment for April reflected a continued rise in collective confidence. Specifically, the reading rose to 84.1, hitting a nine-month peak and exceeding economists' estimates. The mid-month reading came in at 82.6. (FOX Business)
  3. AMZN reported a 23% jump in sales for its first quarter , narrowly exceeding analysts' expectations. Looking forward, however, the online retailing giant said it expects to post an operating loss in the second quarter, though sales are projected to rise between 15% and 26% on a year-over-year basis. (The New York Times)
  4. In the midst of an intraday tumble, Advanced Micro Devices, Inc. ( AMD ) was targeted by put sellers betting on intermediate-term technical support.
  5. Option bulls were caught off guard by Ford Motor Company's (F) poorly received earnings report.


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



Commodities :

Oil futures retreated on Friday, as concerns about robust inventory levels in the U.S. trumped any Ukraine-related anxiety. The June contract slipped $1.34, or 1.3%, to close at $100.60 per barrel. For the week, oil declined 3.5%, the commodity's worst weekly deficit since mid-March.

Gold futures, on the other hand, moved higher for the third day in a row, amid geopolitical concerns and a pullback in U.S. equities. By the closing bell, June-dated gold had jumped $10.20, or 0.8%, to rest at $1,300.80 an ounce. Week-over-week, gold edged 0.5% higher.


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

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

This article appears in: Investing Options
Referenced Stocks: AMZN , TSLA , ATLS , AMD , MCD

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