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Dow Suffers a Triple-Digit Drop Amid Syria Headlines

By: Schaeffer's Investment Research
Posted: 8/27/2013 4:27:00 PM
Referenced Stocks: AAPL;BAC;KO;QIHU;TSLA

"Today was all about Syria and potential U.S. military involvement. Nearly every major sector finished deep in the red after an increase in uncertainty surrounded the market," said Schaeffer's Senior Equity Analyst Joe Bell, CMT. "The S&P 500 Index (SPX) is now trading at its lowest level since early July." Similarly, the Dow Jones Industrial Average (DJI) took a major tumble, and finished with a triple-digit loss.

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

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The Dow Jones Industrial Average (DJI - 14,776.13) dropped right out of the gate and kept on falling (a few short-lived blips higher notwithstanding). By the close, the blue-chip bellwether shed 170.3 points, or 1.1%, suffering its lowest daily close since June 25. Coca-Cola ( KO ) led the Dow's two advancers with a modest gain of 0.1%, while Bank of America ( BAC ) and Microsoft (MSFT) paced the 28 decliners with a drop of 2.6% each.

The S&P 500 Index (SPX - 1,630.48) followed a similar path, and finished 26.3 points, or 1.6%, lower -- its worst close since July 3. Meanwhile, the Nasdaq Composite (COMP - 3,578.52) tumbled 79.1 points, or 2.2%.

Conversely, the CBOE Market Volatility Index (VIX - 16.77) spent the entire session in the black, touching an intraday peak of 17.13 and closing at its highest point since June 28. In the end, the "fear barometer" gained 1.8 points, or 11.9%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"There wasn't a whole lot to be happy about today, as stocks have struggled to rebound, and treasuries continue to receive a lot of money flowing to the safety trade," remarked Bell. "As a result, many rate-sensitive stocks like telecom and utilities took leadership roles today."

3 Things to Know About Today's Market :

5 Stocks We Were Watching Today :

  1. China-based Qihoo 360 Technology ( QIHU ) snagged an upgrade just days after reporting stronger-than-expected quarterly earnings.
  2. The SPDR Gold Trust's (ETF) (NYSEARCA:GLD) positive price action didn't deter one trader from selling a block of November-dated calls.
  3. Weekly call buyers and sellers converged on Netflix (NFLX) , with both groups eyeing the $300 mark.
  4. Green Mountain Coffee Roasters (GMCR) saw a surge in put volume, as one trader used December options to construct a bearish spread on the stock.
  5. Speculators had a change of heart toward QUALCOMM (QCOM) and scooped up September-dated put options.

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 surged, as tensions regarding a potential U.S. missile attack on Syria pushed oil to an 18-month peak. By the time the dust settled, October-dated oil spiked $3.09, or 2.9%, to close at $109.01 per barrel. It was black gold's first close above the $109-per-barrel mark since February 2012.

Likewise, today's headlines bolstered gold futures' safe-haven appeal, with the malleable metal notching its highest finish since mid-May. December-dated gold gained $27.10, or 2%, to end at $1,420.20 an ounce.

SCHAEFFER'S MARKET POSTURE