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Dow Jones Industrial Average Dips on Portuguese Debt Shock

The DJI recovered from its intraday lows by the close

by 7/10/2014 4:20:02 PM
Stocks quoted in this article:

The Dow Jones Industrial Average (DJI) backpedaled today, pressured by fresh financial turmoil out of Europe. After its parent company fell short on debt obligations, one of Portugal's biggest lenders took a dive in Lisbon -- shortly before trading was halted in shares of both companies. Here in the U.S., traders weighed a surprise drop in jobless claims against an afternoon speech from Kansas City Fed President Esther George, who said the central bank may start the process of raising interest rates as early as this year. Against this backdrop, the major equity indexes swallowed their steepest losses right out of the gate, but pared their declines in the second half of the session.

Continue reading for more on today's market, including:

Trading Topic of the Week -- Ways to Interpret Short Interest: Eye the stock's price action. By considering the stock's performance, you can determine the bears' motivations -- and see whether they've been on the right side of the trend in the past.

The Dow Jones Industrial Average (DJI - 16,915.07) closed on a loss of 70.5 points, or 0.4%, as 22 of its 30 components declined. The Home Depot, Inc. (NYSE:HD) was the worst-performing blue chip, down 1.7%, while Verizon Communications Inc. (NYSE:VZ) led the six gainers with a 1.5% advance. Both The Boeing Company (NYSE:BA) and Cisco Systems, Inc. (NASDAQ:CSCO) finished flat.

The S&P 500 Index (SPX - 1,964.68) dipped 8.2 points, or 0.4%, recovering from an intraday dip below its 20-day moving average. The Nasdaq Composite (COMP - 4,396.20) lost 22.8 points, or 0.5%, to finish just shy of the round 4,400 level.

The CBOE Volatility Index (VIX - 12.59) rallied, jumping 0.9 point, or 8.1%. So far this week, the "fear index" has popped 22% higher.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

5 Items on Our Radar Today:

  1. Trading was halted today in Banco Espirito Santo, Portugal's second-largest bank, after its parent company missed debt payments. The resulting market turmoil prompted some European companies, including Spain's Banco Popular Espanol, to postpone their planned stock and bond offerings. (The New York Times)
  2. First-time jobless claims dropped by 11,000 last week to a seasonally adjusted 304,000, according to the Labor Department -- a seven-week low. The data was unexpectedly strong, as most economists were bracing for an increase in initial unemployment claims. (MarketWatch)
  3. The U.S. Federal Trade Commission (FTC) filed suit against Amazon.com, Inc. (NASDAQ:AMZN) over in-app purchases made by children. The FTC is asking AMZN to refund its customers for any unauthorized transactions made within the retail giant's app, which doesn't require a password before allowing purchases to be made. (TechInsider)
  4. As the stock plumbed new all-time lows, one formerly bullish options trader called it quits on Molycorp Inc (NYSE:MCP).
  5. Short-term put traders bet on First Solar, Inc. (NASDAQ:FSLR) to decline through the end of this week.
EARNINGS

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

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