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Bulls Tap the Brakes After Fed Announcement, GDP News

Posted
1/30/2013 4:20:00 PM
By: Schaeffer's Investment Research
Referenced Stocks:AMZN;BA;FB;GE;ZNGA

"Today was all about the economy," quipped Schaeffer's Senior Equity Analyst Joe Bell. "Meanwhile," he added, "the Federal Reserve said its asset repurchase program would continue, but that did little to stop the slight decline in the broad market." The Dow Jones Industrial Average (DJI) spent the majority of the day in the red and settled near its intraday low, with the 14,000 level still beckoning overhead.

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

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The Dow Jones Industrial Average (DJI) was all over the map today, but went into the red for good following this afternoon's release of the Federal Open Market Committee report and decision to keep short-term interest rates near zero. It was only the third down day in 15 sessions for the blue-chip index, which fell to 13,910.42, down 44 points, or 0.3%. Only nine members of the 30-company Dow advanced, led by The Boeing Company ( BA ), which jumped 1.3% to close at $74.59 following a strong earnings result . At the bottom of the 21 decliners was General Electric Company ( GE ), which dropped 1.2% to close at $22.23.

Other indices also fell, with the S&P 500 Index (SPX) dropping nearly 6 points to close at 1,501.96, down 0.4%. But the SPX stayed above the key 1,500 level for the fourth straight day and was down for only the second time in 11 sessions. And the Nasdaq Composite (COMP) fell to 3,142.31, shedding 11 points, or 0.4%.

The CBOE Volatility Index (VIX) reflected all the uncertainty, climbing 7.6% to close at 14.32 -hitting its highest point since the first two sessions of 2013.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Aside from the GDP and Fed news, Amazon.com ( AMZN ) released earnings last night that were well received by the Street today," noted Bell. "While the news didn't lift the broad market, some of the tech-heavy indices showed relative strength."

3 Things to Know About Today's Market :

5 Stocks We Were Watching Today :

  1. Online retail giant Amazon.com, Inc. ( AMZN ) was a big target for short-term options players looking to cash in on volatility surrounding the company's earnings release.
  2. Short-term bears were betting against a recent bounce higher in online game maker Zynga Inc ( ZNGA ).
  3. Chesapeake Energy Corporation (CHK) drew a lot of front-month call action on the heels of strong price action and news that its CEO would step down.
  4. Exxon Mobil (XOM) was downgraded at Macquarie ahead of its earnings release on Friday.
  5. Hoping to cash in on inflated implied volatility levels, Las Vegas Sands Corp. (LVS) speculators sold both calls and puts .

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 :

Crude futures notched another new four-month high, dismissing a larger-than-expected increase in U.S. inventories in favor of the Fed statement, which spurred hopes for a continued low-interest-rate environment. The March contract for oil rose 37 cents, or 0.4%, to $97.94 per barrel, its highest reading since Sept. 14. Elsewhere, gold reacted positively to the surprise contraction in the fourth-quarter GDP. February futures for the yellow metal gained $19.10, or 1.2%, to settle at $1,679.90 per ounce.

SCHAEFFER'S MARKET POSTURE

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