"In the end, fiscal-cliff concerns dominated. No deal meant more worry, and we sold off," sighed Schaeffer's Senior Technical Strategist Ryan Detrick. The Dow Jones Industrial Average (DJI) languished below breakeven throughout the day as everyone began ticking down the hours remaining until the calendar turns, bringing with it potential tax hikes and spending cuts. Anxiety accelerated as the closing bell approached, and the Dow finished on the downside of 13,000 for the first time since Dec. 4.
Continue reading for more on today's market, including:
It was a mirror image of Thursday's session, with selling pressure on the Dow Jones Industrial Average (DJIA) intensifying into the closing bell. The blue-chip average visited its intraday low of 12,926.86 around 3:50 p.m., and closed off 158 points, down 1.2%, below the round-number 13,000 mark. All 30 Dow components suffered losses, with Hewlett-Packard (NYSE:HPQ) shedding the most, down 2.6%. At the top of the heap was American Express (NYSE:AXP), backsliding just 0.04%. On the week, the Dow surrendered 1.9%.
Elsewhere, the S&P 500 Index (SPX) suffered a 15.7-point, or 1.1% drop, but managed to hold narrowly above the 1,400 level. The Nasdaq Composite (COMP) gave back 25.6 points, or 0.9%. The SPX was off 1.9% for the holiday-shortened week while the COMP dropped 2%.
The CBOE Market Volatility Index (VIX) benefited from today's increased volatility, of course, leaping up 16.7% or 3.3 points to close at its highest point since mid-June. On a weekly basis, the index surged 27.4%.
A Trader's Take:
"In the end, fiscal-cliff worries dominated. No deal meant more worry, and we sold off," said Detrick. "The economic data, however, wasn't too bad. The Chicago purchasing managers index [PMI] and home sales were both better than expected," he noted. "Of course, it didn't matter because we had no fiscal-cliff deal in place, but under the surface, the economic data across the board has been pretty good. I wish I had more to say," Detrick continued, "but I'm just tired of the fiscal-cliff drama and can't wait for it to be over with so we can all move on with our lives."
3 Things to Know About Today's Market:
Plus ... SeaWorld Entertainment will be going public via private equity firm Blackstone Group. Blackstone bought the theme park chain in late 2009, and has turned it around significantly during the past three years. In 2009, SeaWorld booked a loss of $58 million, and through the first three quarters of 2012, the chain had collected $86 million in profits. This reversal has come at a profound cost, however, as Blackstone has invested heavily into sprucing up the chain's 11 parks, and has assumed SeaWorld's sizable debt. A date for the proposed IPO has not yet been announced.
Today's Top Tweet:
" The courage the Greeks displayed in voting for their own austerity is in stark contrast to what is happening in the US now"
@VIXandMore, (Bill Luby), 12:29 p.m.
5 Stocks We Were Watching Today:
Question of the Day:
Q: Why are short interest numbers important?
A: Short interest is a measure of shorting activity by equity traders, and is often a good gauge of overall investor pessimism. As contrarians, we see rising short interest on a technically strong security as a potentially bullish sign. If the stock continues higher, traders who shorted the stock may wish to exit their position by buying the shares, perpetuating a short-covering rally, also known as a "short squeeze." For downtrending stocks, however, increasing short interest can be a warning sign, as a stock may suffer additional losses as bearish investors increase their shorted positions.
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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