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Dow Declines Again; VIX Pulls Back

An unimpressive start to the week as major equity indexes end lower

by 1/27/2014 4:24:42 PM
Stocks quoted in this article:

"After a very rough end to last week, early on it seemed like more of the same," said Schaeffer's Senior Equities Analyst Joe Bell, CMT. "Small-caps and technology stood out as the big underperformers today. Fortunately for the bulls, many sectors finished well off their lows as traders continued to buy the dip." Against this backdrop, the Dow Jones Industrial Average (DJI) spent time on both sides of breakeven before settling modestly lower.

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The Dow Jones Industrial Average (DJI - 15,837.88) traded in a 159-point range, but ultimately closed on a modest loss of 41.2 points, or 0.3%. Visa Inc (NYSE:V) paced the 16 declining Dow members with a 2.3% pullback, while Caterpillar Inc. (NYSE:CAT) led the 13 gainers with a 5.9% pop. JPMorgan Chase & Co. (NYSE:JPM) finished flat.

The S&P 500 Index (SPX - 1,781.56) also spent some time on positive ground, but closed on a dip of 8.7 points, or 0.5%. The Nasdaq Composite (COMP - 4,083.61) swallowed the steepest drop, shedding 44.6 points, or 1.1%.

Following a short-lived intraday surge up to 18.99, the CBOE Volatility Index (VIX - 17.42) ended on an anticlimactic note, shedding 0.7 point, or roughly 4%.



A Trader's Take:

"Although December home sales came in worse than expected, it was interesting to see homebuilders recover quite a bit intraday and show some relative strength," observed Bell. "Meanwhile, all eyes will be on tech giant Apple as it reports earnings tonight."

5 Items on Our Radar Today:

  1. New homes sales slipped 7% last month to a seasonally adjusted annual rate of 414,000 units, and the November reading was revised lower to reflect a pace of 445,000. The December reading fell short of economists' estimates. (Reuters via CNBC)
  2. Caterpillar reported better-than-expected earnings and sales for its fourth quarter. Additionally, the machinery manufacturer offered an upbeat early outlook for the current fiscal year and announced a $10 billion stock buyback plan. (Reuters)
  3. April-dated puts were in heavy rotation on Micron Technology, Inc. (NASDAQ:MU), with some shareholders potentially looking to lock in paper profits.
  4. Following the stock's big gap higher last week, BlackBerry Ltd (NASDAQ:BBRY) scored a bullish note from MKM Partners this morning.
  5. Intel Corporation (NASDAQ:INTC) drew some out-of-the-money call buying at a round-number strike.

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

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