"The market has had a nice run and it needed something to spark the selling ... well, today it was the Fed minutes," said Schaeffer's Senior Technical Strategist Ryan Detrick, CMT, of today's trading. The Dow Jones Industrial Average (DJI) fell below 14,000 after hitting a five-year high in early trading, plummeting on the possibility that the Federal Reserve's bond buyback program may be ending. "The consensus was the minutes revealed the Fed might stop the stimulus a little earlier than expected. This led to some heavy selling across the board."
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The day got off to a slow start for the Dow Jones Industrial Average, with disappointing new housing data setting the stage. Then the latest Federal Reserve minutes -- which showed division over the bank's bond buyback program -- led to a deeper selloff, with the Dow closing at 13,927.54, down 108 points, or 0.8%, after hitting a five-year high of 14,058.27 in mid-morning trading. Only six of the 30 companies on the Dow advanced, led by drug maker Merck & Co. (NYSE:MRK), which climbed 1%. The 24 decliners were led by Alcoa (NYSE:AA), which dropped 3.3%.
The S&P 500 Index (SPX) also fell, dropping nearly 19 points, or 1.2%, to close at 1,511.95. The index did stay above the 1,500 mark for the 11th consecutive session. The Nasdaq Composite (COMP) fell 49 points, or 1.5%, to finish at 3,164.41.
The CBOE Volatility Index (VIX) closed at 14.68, jumping 2.4 points, or 19.3%, to close above 14 for the first time since Feb. 4.
A Trader's Take:
"We were due for a pullback eventually, since the market can't go up forever," Detrick said. "My big concern is that small-caps and technology were hit very hard. Anytime those two areas lag like today, that is concerning for the overall strength of the market."
3 Things to Know About Today's Market:
5 Stocks We Were Watching Today:
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Mid-Caps Nearing a Triple of March 2009 Lows
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