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More Hawkish Fed Comments Pressure Dow Even Lower
8/6/2013 4:18:00 PM
By: Schaeffer's Investment Research
"Comments made by Atlanta Fed President Dennis Lockhart sparked
today's selling," said Schaeffer's Senior Technical Strategist Ryan
Detrick, CMT. "Still, volume was very light, and it seemed like the
bulls used the news as an excuse to sell, versus the bears pushing
things lower. All in all, when volume is light like it has been
recently, intraday volatility is very likely. The bigger-picture
earnings season is winding down, and overall, the economy is on
much better footing than most thought just a month ago." Against
this backdrop, the
Dow Jones Industrial Average (DJI)
suffered a near triple-digit loss for the session.
The Dow Jones Industrial Average (DJI - 15,518.74) stumbled right out of the gate, and touched an intraday low of 15,473.40 during the morning hours of trading. By the close, the blue-chip bellwether was down 93.4 points, or 0.6%. Ahead of tonight's turn in the earnings confessional, Walt Disney ( DIS ) led the Dow's six advancers with a gain of 1.5%, while International Business Machines' ( IBM ) 2.3% decline paced the 24 laggards.
The S&P 500 Index (SPX - 1,697.37) breached the 1,700 level early on in the session, and ended 9.8 points, or 0.6%, lower. Meanwhile, the Nasdaq Composite (COMP - 3,665.77) snapped its streak of achieving new intraday highs to shed 27.2 points, or 0.7%, by the closing bell.
The CBOE Market Volatility Index (VIX - 12.72) hit an intraday peak of 12.93 this morning, and ended up finishing 0.9 point, or 7.4%, higher. However, the "fear barometer" remained below its 10-day moving average for a fourth consecutive day.
A Trader's Take :
"Once again, buyers stepped up later in the afternoon," commented Detrick. "Sure, we were still firmly in the red for the day, but well off the session lows. This is one constant we've seen time and time again -- the bulls come in to buy late in the day. That is exactly what you'd want to see."
3 Things to Know About Today's Market :
5 Stocks We Were Watching Today :
For a look at today's options movers and commodities activity, head to page 2.
Crude oil futures closed lower ahead of the regularly scheduled crude inventories report, as today's overall weak price action weighed on oil prices. By the time the dust settled, September-dated crude was down $1.26, or 1.2%, to finish at $105.30 per barrel.
Meanwhile, gold futures breached the $1,300 level following hawkish comments made by two Fed officials, as well as an upbeat trade gap report. The December-dated contract lopped off $19.90, or 1.5%, to end at $1,282.50 an ounce.