"It was a wild day on Wall Street," observed Schaeffer's Senior Technical Strategist Ryan Detrick, as the Dow Jones Industrial Average (DJI) closed with minor losses after spending nearly all of the day in the black. "We rallied out of the gate after the Fed decision," Detrick outlined, "but after [Fed Chairman Ben] Bernanke's Q&A session, we saw some strong selling."
Continue reading for more on today's market, including:
The Dow Jones Industrial Average (DJIA) was unable to keep its winning streak alive, dipping into negative territory in the final hour of trading. By the close, the blue-chip index had given back all of 3 points, or 0.02%. Despite the technical loss, 17 of the Dow's 30 components were higher on the day, led by Hewlett-Packard (NYSE:HPQ), which gained 1.9%. Wal-Mart (NYSE:WMT) continued to founder amid concerns out of India, and closed with a 2.8% loss.
The S&P 500 Index (SPX) managed to eke out a victory, however, peeking above breakeven at the closing bell to settle with a gain of 0.64 point, or 0.04%. Meanwhile, the Nasdaq Composite (COMP) surrendered 8.5 points, or 0.3%, to close slightly off its low of the day.
The CBOE Market Volatility Index (VIX) powered higher during the last 90 minutes of trading, gaining 2.3%, or 0.4 point. The momentum was not enough, however, to carry the index through the 16 level.
A Trader's Take:
"You can look into what Bernanke said (or how he said it) all you want," said Detrick, "but the reality is that after five straight up days, it won't take much for some sellers to take profits ... I think that is what we saw this afternoon. In the end, I don't think the Fed did anything to rock the boat here." Detrick concluded on a forward-looking note: "We've been waiting all week for this Fed announcement and now we can move on with trading since it's out of the way."
3 Things to Know About Today's Market:
Plus ... Pope Benedict XVI posted his first three Tweets to more than one million followers this morning. Lest ye cynics believe there was someone else behind the proverbial pen, a video was released showing the pontiff using an iPad to craft the messages.
Today's Top Tweet:
"ok now that that uncertainty is out of the way we are done with uncertainty. Oh... wait..."
@fundmyfund, 12:45 p.m.
5 Stocks We Were Watching Today:
Question of the Day:
Q: What happens to a stock's options when the stock splits?
A: When a stock splits, the options are adjusted accordingly, along with the option symbols. For example, if a stock splits two-for-one, the option holder will have twice as many options (at half the strike price). However, when the split is non-integral (3:2) or a reverse split (1:5), the resulting option contract may be more complicated. A three-for-two stock split of a stock trading at $60, for example, would leave holders of the 60 call with 40-strike calls each covering 150 shares of the underlying. In the case of a one-for-five reverse split, an options buyer holding one contract (worth 100 shares of the underlying) holds one contract (worth 20 shares each).
For a look at today's options movers and commodities activity, head to page 2.
The Case for Big Moves in IWM and QQQ
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