All eyes were on Washington today, as budget talks hit another obstacle, and President Obama took time out from the fiscal-cliff wrangling to nominate Senator (and former presidential candidate) John Kerry, D-Mass., as secretary of state. Meanwhile, sellers were in control, sending the Dow Jones Industrial Average (DJI) into the red by a healthy margin. While there were several economic data points hitting the newswires, "Although markers quickly rebounded from what looked to be a massive hit, they were still firmly in the red from the open and drifted lower for much of the day," remarked Schaeffer's Senior Equity Analyst Joe Bell.
Continue reading for more on today's market, including:
The Dow Jones Industrial Average (DJIA) started and ended the day in the red, but the plunge out of the gate never really intensified. In fact, the worst it got was shortly before noon, when the index was off 189 points at 13,122.53. The Dow did settle below its 10-day moving average for the first time since Nov. 16, however, and closed with a loss of 121 points, or 0.9%. Just two names among the Dow 30 -- American Express (NYSE:AXP) and McDonald's (NYSE:MCD) -- managed to peek into the black, up 0.4% and 0.2%, respectively, while Bank of America (NYSE:BAC) paced the declining majority, losing 2% on the day. For the week, the Dow was 0.4% higher.
The S&P 500 Index (SPX) danced back south of the 1,440 level, shedding 13.5 points, or 0.9%, to bring its weekly gain down to 1.2%. Turning to tech, the Nasdaq Composite (COMP) fell 29 points, or 1%, but settled up 1.7% for the week.
The CBOE Market Volatility Index (VIX) had a wild day, trading in a range from 17.76 to 19.93 before ultimately closing up just 0.9%, or 0.17 point. This week, the VIX tacked on 4.9% amid rising uncertainty as the end of the year looms.
A Trader's Take:
"Markets don't like uncertainty, and it's anyone's guess how this whole fiscal-cliff negotiation will end," stated Bell. "But given the overnight price action and the 'mini flash crash' last night, the fact that the Dow dropped less than 150 points felt like a small victory. It was also encouraging," he added, "that small-caps and mid-caps continue to take a leadership role, even on tough days like today."
3 Things to Know About Today's Market:
Plus ... as the era of paperless journalism continues its approach, Spin magazine announced plans to convert to an all-digital format, after 27 years on the nation's newsstands. The publication -- which originally debuted as a more "alternative," well, alternative to Rolling Stone -- recently underwent steep layoffs and began publishing on a bimonthly basis versus monthly.
Today's Top Tweet:
"Who did a worse job at negotiating, Boehner or the NHL owners?"
@LDrogen, 1:59 p.m.
5 Stocks We Were Watching Today:
Question of the Day:
Q: What are the current "circuit breakers" on the Dow?
A: Every quarter, the NYSE establishes three "circuit breakers," defining levels on the Dow Jones Industrial Average (DJI) at which trading will be halted on a decline. As of the fourth quarter of 2012, these levels on the Dow were 10%, 20%, and 30% lower, or drops of roughly 1,350, 2,700, and 4,050 points.
A 30% drop precipitates an automatic close of the market for the remainder of the day, regardless of when the drop occurs. A decline of 20% before 1:00 p.m. Eastern prompts a two-hour halt; a 20% pullback at or after 2:00 p.m. results in closure for the remainder of the day (a drop of 20% between 1:00 and 2:00 p.m. leads to a one-hour halt). Finally, a 10% drop before 2:00 p.m. results in a one-hour closure, and between 2:00 and 2:30 p.m. prompts a half-hour halt. Any time after 2:30 p.m., the market will remain open on a 10% drop (barring a drop of 20% or more).
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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