"Another day, and more drama from Washington," quipped Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Janet Yellen taking over as head of the Fed was the headline news, but in the end, today's bounce was pretty weak. Small-caps and the Nasdaq Composite (COMP) were both in the red, adding to yesterday's big drop." The Dow Jones Industrial Average (DJI), on the other hand, closed slightly higher on the day, but well off its intraday peak.
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The Dow Jones Industrial Average (DJI - 14,802.98) traded in positive territory for most of the afternoon, but pared some of its gains by the closing bell. By the time the dust settled, the blue-chip index had added 26.5 points, or 0.2%. Half of the Dow's 30 components closed higher, led by AT&T (NYSE:T), which gained 1.9%. Bringing up the rear was Merck (NYSE:MRK), pacing the declining 14 issues with a 1% drop. American Express (NYSE:AXP) was unchanged.
The S&P 500 Index (SPX - 1,656.40) bounced near the 1,650 mark in late-morning trading to end up 1 point, or 0.1%. The Nasdaq Composite (COMP - 3,677.78), however, tumbled for a third straight day, closing down 17.1 points, or 0.5%, to finish a hair below its 60-day moving average.
The CBOE Market Volatility Index (VIX - 19.60) hit an intraday peak of 21.34, but ultimately couldn't manage a second consecutive daily close above 20 -- a feat that hasn't been accomplished this year. The fear barometer ended 0.7 point lower, down 3.6%.
A Trader's Take:
"The Dow did find support down near its 200-day moving average today," noted Detrick. "This trendline is heavily watched and it is nice it stopped the bleeding. The Dow has been the weakest index the past few months, and it is the first one to this trendline. Nonetheless, as the saying goes, 'news trumps charts,' so while this bounce is a bit of a relief, in the end the market will remain handicapped until Washington gets its act together."
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