Schaeffer's Trading Floor Blog

Afternoon Market Stats: Dow Jones Industrial Average Tumbles 108 Points

SNE plummets on plans to issue convertible bonds

by 11/14/2012 2:35 PM
Stocks quoted in this article:

The Dow Jones Industrial Average (DJI - 12,647.85) is down 108 points, or 0.9%, having erased earlier gains triggered by a strong quarterly earnings report from Cisco Systems, Inc. (NASDAQ:CSCO). Meanwhile, during his first press conference since his re-election, President Barack Obama re-emphasized his proposal to reduce the federal deficit by implementing higher taxes on the wealthy. Elsewhere, the minutes from the Federal Open Market Committee's (FOMC) October meeting showed that Fed officials are closer to revising their guidelines for determining when to raise interest rates. However, it was also noted that rates are expected to remain near zero until mid-2015.

On the economic front, the Commerce Department said retail sales fell by a seasonally adjusted 0.3% in October -- notching their sharpest decline since June, and falling short of analysts' expectations for a drop of just 0.1%. Also, the Labor Department revealed that the producer price index decreased by 0.2% in October, disappointing economists' projections for a 0.2% increase. Concurrently, the CBOE Market Volatility Index (VIX - 16.93) is 0.3 point, or 1.7%, higher.

Here are a few noteworthy stats at 2:30 pm EST:

  1. The equity put/call volume ratio across all 10 options exchanges sits at 0.98, with 5.6 million calls changing hands so far today, versus 5.5 million puts.

  2. Among the equities with call-slanted activity is Abercrombie & Fitch Co. (NYSE:ANF - 40.84), which has jumped roughly 31% today, thanks to a better-than-anticipated third-quarter earnings report. Currently, calls account for 63% of the retailer's intraday option volume.

  3. The put/call volume ratio on the iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX - 34.79) checks in at 0.83, with calls outnumbering puts.

  4. The New York Stock Exchange (NYSE) shows an advance/decline ratio of 0.22, with the number of downward movers more than quadrupling the advancers.

  5. Among the NYSE's major decliners is Sony Corporation (ADR) (NYSE:SNE - 9.80), which has shed about 9% -- and tagged a new 25-year low of $9.77 -- in intraday trading, after announcing plans to issue a $1.87-billion, zero-coupon convertible bond, which will enable the company to raise funds for debt repayment and other strategic investments. However, SNE also noted that this will likely pressure the stock lower in the near term.

  6. Bullish sentiment declined last week, according to the latest Investors Intelligence survey. The percentage of financial advisors with a bullish view on stocks fell to 38.3% from 43.6%, while the percentage bearish rose to 28.7% from 27.7%. Meanwhile, the percentage of advisors expecting a market correction climbed to 33.0% from 28.7%.
Unusual Option Volume at Midday

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