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Dow Plummets 266 Points, VIX Spikes 43% on Commodities Nosedive

By: Schaeffer's Investment Research
Posted: 4/15/2013 4:19:00 PM
Referenced Stocks: BAC;CAT;FB;NFLX;WMT

"There wasn't a whole lot to cheer about today," admitted Schaeffer's Senior Equity Analyst Joe Bell. "There was a combination of negative economic drivers, but China's worse-than-expected gross domestic product (GDP) number was most prominent. Gold and other commodities were hit the hardest, with the yellow metal registering one of its worst days in several years." The Dow Jones Industrial Average (DJI) added to its losses as the day dragged on, ending with a deficit of more than 260 points. Meanwhile, the CBOE Market Volatility Index (VIX) reacted to all the turmoil by shooting more than 43% higher.

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

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The Dow Jones Industrial Average quickly entered negative territory this morning and continued to lose ground throughout the session, violating its 10-day moving average along the way. By the time the closing bell mercifully sounded, the blue-chip index was a hair's breadth from its intraday nadir, down 266 points, or 1.8%, at 14,599.20. Losses were broad, as all 30 Dow components finished in the red. The "best" performing name was Wal-Mart Stores ( WMT ), down only 0.1%. Bringing up the rear was Caterpillar ( CAT ), down 3.3%.

The S&P 500 Index (SPX) also ended the session near its intraday low and south of its 10-day moving average. By the close, the SPX was off 36 points, or 2.3%, at 1,552.36. The Nasdaq Composite (COMP) was slightly worse for wear, down 78 points, or 2.4%, to close at 3,216.49.

The CBOE Market Volatility Index (VIX) spiked 5.2 points, or more than 43%, to settle at 17.27, its highest close since late February.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"In addition to the news out of China, housing data was also pretty bad," noted Bell. "As the market treaded water near its lows, news also surfaced of explosions at the Boston Marathon. In a day filled with bad news, this, of course, stands above the rest."

3 Things to Know About Today's Market :

5 Stocks We Were Watching Today :

  1. With earnings due later this week, Microsoft (MSFT) has seen increased bearish betting .
  2. Google Inc (GOOG) was initiated with a "buy" rating and an ambitious price target of $950 this morning.
  3. Long-term, deep out-of-the-money puts were popular in Tesla Motors (TSLA), possibly as a protective-put strategy.
  4. Netflix, Inc. ( NFLX ) traders targeted short-term upside with out-of-the-money calls.
  5. In a relatively rare show of bearishness , Las Vegas Sands (LVS) speculators scooped up long 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 :

Oil continued to retreat, dropping to its lowest point in 2013 after Chinese industrial production data fell short of expectations. May-dated crude dropped 2.8%, or $2.58, to end at $88.71 per barrel.

This move paled in comparison to gold, which posted its steepest one-day decline in more than 30 years. The June gold contract gave back $140.30, or 9.3%, to end the session at $1,361.10 an ounce. This was the lowest settlement price for a most-active contract since February 2011.

SCHAEFFER'S MARKET POSTURE

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