Markets

Dow Snaps Five-Day Winning Streak, S&P 500 Faces Resistance

After five sessions of gains -- and more than one new all-time high -- the Dow Jones Industrial Average (DJI) succumbed to selling pressure today, ending the day with a triple-digit deficit. Elsewhere, "The S&P 500 Index (SPX) is clearly facing some pretty stiff technical resistance near the 1,900 round-number level, which is near the site of its former all-time high from April," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Couple that with the less-than-stellar economic data so far this week, and investors are looking to take some risk off the table."

Continue reading for more on today's market, including

Trading Topic of the Week -- Ways 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 - 16,613.97) spent nearly all of the day moving further into negative territory, before closing down 101.5 points, or 0.6%. The pullback was broad-based, as 25 of the Dow's 30 components ended lower, paced by International Business Machines Corp. ( IBM ), which dropped 1.8%. Leading the five advancers today was Merck & Co., Inc. ( MRK ), rising 1.1%.

The S&P 500 Index (SPX - 1,888.53) retreated as well, closing with a loss of 8.9 points, or 0.5%. The Nasdaq Composite (COMP - 4,100.63) continued its pullback, shedding 29.5 points, or 0.7%, by the close.

The CBOE Volatility Index (VIX - 12.17) bounced slightly from recent losses, edging up less than 0.1 point, or 0.3%, today.

A Trader's Take

"Whether the market is up or down, it seems like small caps continue to trail their counterparts," continued Bell. "Consumer discretionary stocks are among the biggest laggards, and yesterday's worse-than-expected retail sales number and recent earnings results aren't helping their cause."

5 Items on Our Radar Today

  1. Wholesale prices posted their largest increase in over a year in April, reported the Labor Department. The PPI climbed 0.6% -- the biggest jump since September 2012 -- to top economists' expectations. The core PPI, which excludes food and energy factors, rose 0.5%, also exceeding the consensus estimate. (Los Angeles Times)
  2. The yield on the 10-year Treasury note dipped to a six-month low of 2.525%. The move raised a flag, as some consider the 2.6% level a "risk-off" point at which traders begin to exit their equity positions. (CNBC)
  3. Tesla Motors Inc ( TSLA ) options buyers took advantage of bargain-basement pricing.
  4. Nomura reduced its price target on Google Inc (GOOGL) this morning, while other tech heavyweights faced negative brokerage attention.
  5. Fresh from a new 12-year high, Micron Technology, Inc. (MU) was targeted by back-month put buyers today.

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

Commodities

June crude futures rose to a three-week high, amid declining supplies and increased expectations for rising seasonal oil demand. The most active contract added 67 cents, or 0.7%, by the close, to end the session at $102.37 per barrel.

Gold rebounded today, as continued Ukraine-related worries and a slump in U.S. equities bolstered the yellow metal's appeal. The June-dated contract climbed $11.10, or 0.9%, to settle at $1,305.90 an ounce, gold's first close north of $1,300 in more than a week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Schaeffer's Investment Research, Inc. has been providing stock market publications, market recommendation services and stock option education since its inception in 1981 by founder and CEO, Bernie Schaeffer.

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