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Bears Emerge on World Bank News; Dow Snaps Winning Streak

Gold edges higher for third consecutive session

by 6/11/2014 4:17:18 PM
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"After a strong run-up the past few weeks, we experienced a rare bad day for the market, and most indexes finished in the red," noted Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Some of the selling may have been triggered by the World Bank cutting its 2014 global growth outlook to 2.8% from 3.2%." Against this backdrop, the Dow Jones Industrial Average (DJI) succumbed to selling pressure. After dipping more than 124 points at its intraday low, the blue-chip index closed with a triple-digit loss.

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The Dow Jones Industrial Average (DJI - 16,843.88) spent the session south of the flat line, closing near its 10-day moving average with a loss of 102 points, or 0.6%. Just four Dow names managed to move higher, paced by Merck & Co., Inc. (NYSE:MRK), which rose 0.6%. The Boeing Company (NYSE:BA) was at the back of the pack, losing 2.3% today.

The S&P 500 Index (SPX - 1,943.89) traded below the 1,950 level all day, and closed down 6.9 points, or 0.4%. The Nasdaq Composite (COMP - 4,331.93) also lost ground -- though not as much -- giving back 6.1 points, or 0.1%.

The CBOE Volatility Index (VIX - 11.60) zoomed higher as equities fell, retaking control of the 11 mark. The market's "fear barometer" added 0.6 point, or 5.6%.



A Trader's Take:

"Despite the overall weakness of the market, there wasn't a ton of panic selling, and it felt a little more like profit taking at this point," added Bell. "With the relative strength index (RSI) well into overbought territory on the SPX, it wasn't a huge surprise to see the pullback today."

5 Items on Our Radar Today:

  1. Citing geopolitical unrest and repercussions from a rough winter, the World Bank reduced its global growth forecast for 2014. The organization now predicts the world economy will expand by 2.8% this year, below an earlier forecast for 3.2% growth. The bank lowered its growth outlook for the U.S. to 2.1% from 2.8%. (Reuters, via Chicago Tribune)
  2. The number of mortgage applications filed last week surged 10.3%, amid increased demand for both new home purchases and refinancing options. Meanwhile, the average fixed 30-year mortgage rate ticked up 8 basis points from the previous week, according to the Mortgage Bankers Association. (Reuters)
  3. The options crowd reacted strongly to a better-than-expected earnings report from Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA).
  4. How one Sirius XM Holdings Inc. (NASDAQ:SIRI) call seller collected more than $1 million in premium.
  5. Tech heavyweights Apple Inc. (NASDAQ:AAPL) and, Inc. (NASDAQ:AMZN) earned votes of confidence from Wall Street this morning.

For a look at today's options movers and commodities activity, head to page 2.

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