It was a remarkably dismal day for U.S. stocks, with the major equity indexes turning in their worst performance of 2012 to date. China's freshly slashed economic growth forecast continued to weigh heavily on Wall Street, with industrial issues Caterpillar (CAT) and Alcoa (AA) among the day's notable Dow laggards. Meanwhile, over in Europe, the specter of a disorderly Greek default once again raised its head. Ahead of the Thursday deadline for private bondholders to participate in a voluntary debt restructuring, the Institute of International Finance (IIF) warned of a potentially disastrous ripple effect for the euro zone if the debt swap is not a success. Here on the home front, amid all of the "Super Tuesday" hype about gas prices and income tax rates, traders took the negative news from abroad as a cue to yank some cash off the table -- particularly with a fresh round of U.S. jobs data set to commence tomorrow, when ADP unveils its private-sector payrolls report for February. As a result, stocks finished the session with significant losses, while the market's "fear index" skyrocketed.
The Dow Jones Industrial Average (DJIA – 12,759.15) ended the day with a thump, shedding 203.7 points, or 1.6%. Among the Dow's 30 components, only Intel (INTC) managed to close in the black, with the chip giant eking out a 0.2% win. Alcoa paced the 29 decliners with a 4.1% drop, while Caterpillar was right behind with a 3.7% slide. Today's sizable drop left the Dow beneath its 40-day moving average, which hadn't been breached on a daily closing basis since Dec. 19.
The S&P 500 Index (SPX – 1,343.36) suffered a similarly sharp drop, giving up roughly 21 points, or 1.5%. The SPX found an intraday foothold at 1,340, which previously served as a floor throughout the first half of February. Finally, the Nasdaq Composite (COMP – 2,910.32) gapped lower out of the gate, and fell as far south as the 2,900 level at its session low. The COMP eventually pared its decline to 40.2 points, or 1.4%.
Meanwhile, the CBOE Market Volatility Index (VIX - 20.87) surged 15.6% to notch its highest close in nearly three weeks. In the process, the VIX settled atop its 50-day moving average for the first time since Nov. 25.
Turning to equities in focus, Senior VP of Research Todd Salamone listed three indicators that suggest the SPDR Gold Trust (GLD) could be headed for a stretch of short-term weakness ... Shares of Monster Worldwide (MWW) jumped after the employment website announced it has retained advisers in connection with its strategic review ... Shuffle Master (SHFL) reported stronger-than-expected first-quarter earnings, along with its acquisition of Ongame Network ... Yahoo suffered a decline amid reports that its latest cost-cutting plan includes issuing a round of pink slips by month's end ... and today's Quote of the Day comes from MarketWatch's David Weidner, who exposed the truth behind four lingering misconceptions regarding bonuses on Wall Street. As Weidner wrote:
"In the world of compensation, the Wall Street bonus resides somewhere between armed robbery and bullies taking a kindergarten kid's lunch money."
But these weren't the only headlines hitting the Street today. Click on the links below for our blog coverage of:
And, in case you missed it, Adam Warner discussed J.P. Morgan's VXX competitor in his latest column. Click here to read what he has to say about this newest volatility derivative.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
The Case for Big Moves in IWM and QQQ
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