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Lingering Global Concerns Send Dow to Third Consecutive Loss

By: Schaeffer's Investment Research
Posted: 3/12/2014 4:19:00 PM
Referenced Stocks: FB;BBRY;HLF;SBUX;CVX

"Most stocks started the day well into the red, but slowly churned higher, leading to a pretty mixed finish," summarized Schaeffer's Senior Equity Analyst Joe Bell, CMT. "There was no major news on tap today, but the markets continue to struggle with concerns over China's economic growth, and uncertainty surrounding the Ukraine situation." The Dow Jones Industrial Average (DJI) made a brief foray into positive territory around midday, but ultimately settled lower for the third consecutive session.

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

Trading Topic of the Week -- How to Interpret Short Interest: Review the recent trend . Have shorts been covering their bearish bets, or ramping them up?

The Dow Jones Industrial Average (DJI - 16,340.08) had a mere blip above the breakeven mark today, but ended the day with a loss of only 11.2 points, or 0.1%. So far this week, the index has surrendered 0.7%. Chevron Corporation ( CVX ) and Cisco Systems, Inc. (CSCO) each added 1% to pace the 16 Dow advancers. At the back of the pack was Pfizer Inc. (PFE), which dropped 1.4%.

The S&P 500 Index (SPX - 1,868.20) peeked into positive territory just before the closing bell, and settled with a gain of 0.6 point, or less than 0.1%. The Nasdaq Composite (COMP - 4,323.33) outperformed its index peers, adding 16.1 points, or 0.4%, to snap its four-day losing streak.

The CBOE Volatility Index (VIX - 14.47) drifted lower, giving back 0.3 point, or 2.2%, to finish just above its 10-day moving average.



A Trader's Take :

"Gold mining stocks and basic materials showed some strength today, and led most of the other sectors," noted Bell. "Meanwhile, consumer discretionary and financial names lagged. The financial sector led for most of early March, and it seems like we might be seeing a little bit of profit taking during the past couple of days."

5 Items on Our Radar Today :

  1. The European Union (EU) has outlined proposed sanctions against Russia, should the nation fail to back away from the situation in Crimea. Such measures -- the first of their kind since the end of the Cold War -- could include travel restrictions and asset freezes. EU's foreign ministers will vote on the draft proposal on Monday. (Reuters)
  2. Before news of a Federal Trade Commission probe broke this afternoon, one Herbalife Ltd. ( HLF ) bull purchased a call spread, in hopes that the shares will continue to gain ground.
  3. Starbucks Corporation ( SBUX ) ran into double-barreled resistance on the charts, even while news emerged of a retooled iPhone app.
  4. Breaking recent convention, Hewlett-Packard Company (HPQ) options traders scooped up back-month puts to potentially wager on a pullback in the shares.
  5. Option bulls continued to bet on a breakout in Sirius XM Holdings Inc. (SIRI) shares.


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



Commodities :

Following news that crude inventories rose much more than expected, oil futures took a tumble, breaching the psychologically significant century mark. By the close, April-dated futures lost $2.04, or 2%, to settle at $97.99 per barrel.

Gold futures, on the other hand, continued to gain ground, as investors looked for safe-haven solutions amid continued tensions with Russia. Gold for April delivery rose $23.80, or 1.8%, to end the day at $1,370.50 an ounce, the highest close for a most-active contract since Sept. 9. After plunging on Tuesday, May copper futures edged up a penny in today's session, closing at $2.96 per pound.