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Dow Jones Industrial Average Drops; All Eyes on Gaza, Ukraine

The DJI pared its triple-digit deficit in afternoon trading

by 7/21/2014 4:20:39 PM
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The Dow Jones Industrial Average (DJI) was down triple digits at its session low, as mounting geopolitical concerns sparked a "risk off" attitude. However, President Obama took to the podium this morning, urging diplomacy between Russia and Ukraine, and calling for an immediate cease-fire in Gaza, where casualties have topped 500. The commander in chief's words -- which stopped just short of threatening more sanctions against Russia -- brought a few buyers back from the sidelines, with the major market indexes paring their losses in afternoon trading.

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

  • Ahead of earnings, option players are rolling the dice on record highs for Facebook Inc (NASDAQ:FB).
  • Checking in on this trio of blue chips, slated to report this week.
  • Plug Power Inc (NASDAQ:PLUG) bucked the broad-market trend lower, sparking a flood of short-term call buying.
  • Plus ... The U.S. and Russia point fingers, Bill Ackman spooks the Herbalife Ltd. (NYSE:HLF) options crowd, and M&A news for a pair of steel suppliers.
Trading Topic of the Week -- Tips for Buying Weekly Options: Buyers should avoid sluggish stocks. Don't use weekly options to bet on a slowly trending blue chip -- you need a fast, aggressive move in the right direction.

The Dow Jones Industrial Average (DJI - 17,051.73) was down more than 125 points at its lowest point of the day, but pared its loss to 48.5 points, or 0.3%, to maintain its perch atop the 17,000 level. Just eight of the Dow's 30 blue chips finished north of breakeven, led by Intel Corporation's (NASDAQ:INTC) 1.1% gain. General Electric Company (NYSE:GE) paced the decliners for a second straight session, surrendering 1.8%.

The S&P 500 Index (SPX - 1,973.63) also bounced back from its intraday lows, settling 4.6 points, or 0.2%, lower. The Nasdaq Composite (COMP - 4,424.70) came the closest to positive territory, but still finished with a loss of 7.5 points, or 0.2%.

The CBOE Volatility Index (VIX - 12.81) shot higher out of the gate today, but trimmed its lead to 0.8 point, or 6.2%, by the bell. The market's "fear gauge" ended north of its 80-day moving average for the second time in three sessions.



5 Items on Our Radar Today:

  1. "The burden now is on Russia to insist that separatists stop tampering with evidence, [and] grant investigators who are already on the ground immediate, full and unimpeded access to the crash site" of the doomed Malaysia Airlines flight in Ukraine, stated President Obama. If Russia doesn't cooperate, "the costs ... will only continue to increase," he warned. In Russia, meanwhile, the media is blaming CIA-backed Ukrainians for the tragedy. (CNBC)
  2. HLF shares tanked after activist investor Bill Ackman vowed to deliver a "deathblow" to the firm -- which he accused of "incredible fraud" -- tomorrow morning. Against this backdrop, HLF options trading approached fever pitch, with speculators gambling on more short-term downside. (MarketWatch)
  3. Steel Dynamics, Inc. (NASDAQ:STLD) and AK Steel Holding Corporation (NYSE:AKS) made headlines after buying North American plants from Russia's Severstal.
  4. A jury awarded a widow $23.6 billion in punitive damages in a lawsuit against Reynolds American, Inc. (NYSE:RAI) subsidiary R.J. Reynolds Tobacco Co.
  5. Twitter Inc (NYSE:TWTR) short sellers may be picking up calls as short-term hedges.

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

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