Schaeffer's Trading Floor Blog

Market Update: DJIA Drops Triple Digits on Euro Woes, Weak Caterpillar Guidance

The Dow has shed more than 100 points, following suit with a sell-off in Europe

by 12/14/2011 12:44 PM
Stocks quoted in this article:

U.S. stocks are on the rocks at midday, following suit with the bearish mood in Asia and Europe. Surging Italian bond yields helped to incite pre-market anxiety, as did the euro's newly tagged 11-month nadir versus the dollar. In fact, even gold futures have succumbed to the selling spree, as the traditional "safe haven" metal has tumbled about $84 to trade near $1,578.90 per ounce. Instead, uneasy investors are gravitating toward Treasury bonds, with the 10-year yield backpedaling beneath 2% earlier in the session. Meanwhile, in addition to macroeconomic woes, a softer-than-expected 2011 forecast from construction giant Caterpillar (CAT) is also weighing heavily on the Dow. As we head into the afternoon, the major market indexes are firmly planted in the red.

At last check, the Dow Jones Industrial Average (DJIA - 11,851.37) is down 103.6 points, or 0.9%. The S&P 500 Index (SPX - 1,214.82) has shed 10.9 points, or 0.9%, and the Nasdaq Composite (COMP - 2,539.03) has given up 40.2 points, or 1.6%.

DJIA price chartChecking in on Dow components, the aforementioned Caterpillar (CAT - 86.57) is down 4.9% to pace the 21 declining blue chips. Among the nine advancing Dow members, General Electric (GE - 16.70) is leading the charge with a gain of 1.7%.

With equities suffering, the CBOE Market Volatility Index (VIX - 26.71) has bounced to a gain of 5.1% this afternoon. However, the VIX's intraday momentum has so far been limited by its looming 10-day moving average.

Among equities in focus, First Solar (FSLR - 33.88) has spiraled to a loss of 20.4% after providing a bleak forecast for 2011 and 2012. Joy Global (JOY - 74.64) is also swimming in red ink, off 11.7% in the wake of a poorly received earnings report. In brokerage news, Yahoo (YHOO - 14.99) has tumbled 2.8% following a "sell" recommendation from Goldman Sachs -- and Netflix (NFLX - 70.25) isn't faring much better, down 2.6% after attracting a "neutral" rating from the brokerage firm. Over in the options pits, Advanced Micro Devices (AMD) has been targeted by call players, while one bearish bettor extended his winning strategy on NII Holdings (NIHD) ahead of expiration.

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