|Back to main|
Stocks Spiral Lower as Fed Fails to Surprise
5/1/2013 4:32:00 PM
By: Schaeffer's Investment Research
"The Fed's interest-rate decision got the headlines, but the
market was firmly in the red before the news even came out,"
observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT.
"With the European Central Bank still on tap for tomorrow and the
monthly jobs number due Friday, it seemed like today was a good day
for some traders to book profits." The
Dow Jones Industrial Average (DJI)
headed lower out of the gate and continued to sink as the day
progressed, ultimately closing off 139 points.
The bulls were banished to the sidelines today, as the Dow Jones Industrial Average (DJI) settled just off its intraday low. At the closing bell, the blue-chip index was off 139 points, or 0.9%, at 14,700.95, just above its 10-day moving average. Just five Dow components ended the session in positive territory. Leading the advancing minority was Walt Disney ( DIS ), which gained 0.6%. Bringing up the rear were Verizon Communications ( VZ ) and Merck (MRK), both of which dropped 2.8%.
The S&P 500 Index (SPX) was also sharply in the red, shedding 14.9 points, or 0.9%, to 1,582.70, to end atop support at the 1,575 level. The technology sector struggled as well, as the Nasdaq Composite (COMP) gave back 29.7 points, or 0.9%, to close at 3,299.13 after tagging another new 12-year peak of 3,330.02 shortly after the open.
It was a strong day for the CBOE Market Volatility Index (VIX), which surged 1 point, or 7.2%, to settle the session at $14.49. This put the index back atop its 10-day moving average for the first time since April 19.
A Trader's Take :
"Small-cap stocks were crushed today, down more than 2%," noted Detrick. "Remember that the Russell 2000 Index (RUT) never made a new high like its peers, and now it is down 3% from its March 15 peak of $954. This isn't a huge sell signal, but potentially a warning."
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.
Oil futures were in the red again today, driven south by discouraging economic reports out of the U.S. and China. Adding insult to injury, supplies grew by more than expected during the past week. By the close, June crude futures were sitting at $91.03 per barrel, down $2.43, or 2.6%, on the day.
June-dated gold also fell, settling at $1,446.20 an ounce, down $25.90, or 1.8% -- a one-week low for the contract. The precious metal weakened against a backdrop of slumping payroll additions and ahead of the Fed statement.