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Markets Reverse Course Amid Budget Stalemate

By: Schaeffer's Investment Research
Posted: 10/15/2013 4:21:00 PM
Referenced Stocks: HD;JCP;JNJ;MCP;MSFT

"Despite the fact that we had several earnings reports this morning, everyone's attention is simply on Congress and its inability to come to an agreement," mused Schaeffer's Senior Equity Analyst Joe Bell, CMT. "With the debt ceiling deadline quickly approaching, the market seems to be moving up and down on every bit of news and rumor that surfaces relating to the situation." As a result, the Dow Jones Industrial Average (DJI) closed the session with a triple-digit decline, breaking its four-day winning streak.

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

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The Dow Jones Industrial Average (DJI - 15,168.01) spent the entire session in the red, sinking to an intraday low of 15,161.33 during the afternoon hours of trading. By the closing bell, the blue-chip bellwether was down 133.3 points, or 0.9%. Johnson & Johnson ( JNJ ) and Microsoft ( MSFT ) were the Dow's two advancers, both up 0.1%, while Home Depot ( HD ) and Procter & Gamble (PG) paced the 28 decliners with a loss of 1.5% each.

The S&P 500 Index (SPX - 1,698.06) was also parked in negative territory for most of the day -- aside from a brief blip higher just before noon -- and finished 12.1 points, or 0.7%, lower, and below the key 1,700 level. Meanwhile, the Nasdaq Composite (COMP - 3,794.01) shed 21.3 points, or 0.6%.

Elsewhere, the CBOE Volatility Index (VIX - 18.66) climbed higher out of the gate, and closed with a gain of 2.6 points, or 16.1%, just shy of its intraday peak.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"There isn't too much to be positive about," Bell lamented. "It seems as if the market is in a holding pattern with all the uncertainty out of Washington. Today, we saw a bit more selling, as it seems like the two sides are further apart than ever."

3 Things to Know About Today's Market :

5 Stocks We Were Watching Today :

  1. Tesla Motors (TSLA) scored a bullish brokerage note, after the auto concern significantly raised its unit expectations for 2017.
  2. Longer-term call buyers pounced on General Electric (GE) , as the company prepares to reveal quarterly earnings later this week.
  3. A closer look at eBay's (EBAY) sentiment backdrop reveals a bullish bias ahead of tomorrow's quarterly earnings report.
  4. Molycorp's ( MCP ) steep slide triggered a flurry of bearish options activity, as October put players wagered on extended losses.
  5. Front-month option bulls zeroed in on Facebook (FB) , after the security scored a price-target hike in pre-market action.

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 oil suffered its worst daily close since early July, as budget negotiations in Washington and easing concerns over Iran's nuclear program dragged prices lower. By the time the dust settled, the November contract shed $1.20, or 1.2%, to end at $101.21 per barrel.

Likewise, the debt ceiling standoff weighed on gold futures, as well, with the malleable metal closing lower for the fifth time in six days. December-dated gold fell $3.40, or 0.3%, to finish at $1,273.20 an ounce.

SCHAEFFER'S MARKET POSTURE