"It was a very light volume day ahead of a three-day weekend, but that didn't mean it was boring," quipped Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Rumors regarding Syria continued to swirl, creating some decent volatility on a day that is usually incredibly slow. In the end, the indecision over Syria isn't something traders want to hear, and it led to selling across the board." The Dow Jones Industrial Average (DJI) was in the red for nearly all of the day, hitting an intraday nadir of 14,762.35 shortly before the close. It proved to be the worst month for both the Dow and the S&P 500 Index (SPX) since May 2012.
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The Dow Jones Industrial Average (DJI - 14,810.31) spent the day in negative territory, and closed with a loss of 30.6 points, or 0.2%, after being down as much as 79 points mere minutes before the closing bell. Ten of the Dow's components moved higher, led by Wal-Mart (NYSE:WMT) and Procter & Gamble (NYSE:PG), which each gained 0.8%. The 20 laggards were paced by Alcoa (NYSE:AA), which dropped 1.4% today. This week, the Dow surrendered 1.3%, and the blue-chip index lost 4.4% in August -- its worst month since May 2012.
The S&P 500 Index (SPX - 1,632.97) peeked above breakeven just out of the gate, but also surrendered to selling pressure, closing off 5.2 points, or 0.3%. The Nasdaq Composite (COMP - 3,589.87) tumbled into the close, ultimately giving back 30.4 points, or 0.8%. The SPX and COMP lost 1.8% and 1.9% this week, respectively, and posted monthly losses of 3.1% and 1%.
The CBOE Market Volatility Index (VIX - 17.01) continued yesterday's positive momentum, rising 0.2 point, or 1.2%. This was the fear barometer's first close above 17 since June 26. The VIX gained 21.7% this week and logged a 26.5% jump for the month.
A Trader's Take:
"We've been remarking how well tech and small-caps have held up relative to the Dow, but today was the reverse," noted Detrick. "The Dow hung tough and the more aggressive/higher-beta areas were hit extra hard. In the end, August saw the lightest volume since early 2007, yet it was also the worst month for the Dow since May 2012. Which leaves everyone to ask -- is it a good sign we've had some weakness with no conviction from sellers? Or is this just a harbinger of things to come once the big boys come back in September?"
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