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Stocks Fight Back Into the Close Amid Fed-Driven Concerns; Dow Sheds 114 Points

Crude oil retakes the $100 level, while gold continues to lose ground

by 3/19/2014 4:18:32 PM
Stocks quoted in this article:

"Stocks were slightly lower after the Fed meeting, but didn't fall by much until Janet Yellen's question-and-answer session, during which she dropped the bomb that quantitative easing would be done by this fall," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Of course, with five meetings to go and $10 billion -$15 billion per tapering announcement, that brings us right to October. Still, this comment caught many traders off guard and provided some afternoon fireworks to the downside." The Dow Jones Industrial Average (DJI) spent time on both sides of the flat line and traded within a 237-point range before settling 114 points lower.

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

  • Why First Solar, Inc. (NASDAQ:FSLR) surged higher today ... and how options traders responded.
  • Netflix, Inc. (NASDAQ:NFLX) could be at a critical point on the charts.
  • Earnings previews for Silver Wheaton Corp. (USA) (NYSE:SLW), Tiffany & Co. (NYSE:TIF), and Nike Inc (NYSE:NKE).
  • Plus ... The Federal Reserve shifts its tone, FedEx Corporation (NYSE:FDX) faces winter weather woes, and BlackBerry Ltd (NASDAQ:BBRY) attracts bullish speculators.
Trading Topic of the Week -- How to Get Started with Options: Stick with basic strategies. Make sure you master the fundamentals before spreading your wings with iron condors and long butterflies.

The Dow Jones Industrial Average (DJI - 16,222.17) hugged the breakeven line for the majority of the day, before plunging sharply lower around 3:00 p.m. ET. At its intraday nadir, the index was off nearly 210 points. By the close, however, it had bounced back to post a loss of 114 points, or 0.7%. UnitedHealth Group Inc. (NYSE:UNH) led the Dow's four advancers today, rising 2.5%, while The Walt Disney Company (NYSE:DIS) paced the declining majority, shedding 1.8%. Cisco Systems, Inc. (NASDAQ:CSCO) was unchanged on the day.

The S&P 500 Index (SPX - 1,860.77) traded in positive and negative territory as well, shedding 11.5 points, or 0.6%, by the close. At its lowest point, the SPX tested critical support at the 1,850 level. Elsewhere, the Nasdaq Composite (COMP - 4,307.60) posted a decline of 25.7 points, or 0.6%.

The CBOE Volatility Index (VIX - 15.12) gained modest ground on the day, advancing 0.6 point, or 4.1%, to pop back above the 15 mark.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

A Trader's Take:

"Overall, it was your typical Fed day," quipped Detrick. "We saw a good deal of volatility and big moves on news. In fact, historically, Fed days have been strong, but if you look back since just 2013, more often than not we've seen sell-offs. Then traders sleep on it and come in the next day, and we bounce."

5 Items on Our Radar Today:

  1. At the first Federal Reserve meeting piloted by new chief Janet Yellen, there was a shift in rhetoric. Marking an update from a lingering promise to leave interest rates near historical lows, the new language suggested Fed officials will take several indicators into account when determining the future of interest rates. In more specific terms, Yellen theorized that the first interest-rate hike could come as soon as mid-2015. Meanwhile, the central bank maintained its tapering pace, reducing monthly asset purchases by another $10 billion to $55 billion. (The Washington Post; AP via ABC News; Forbes)
  2. FedEx Corporation (NYSE:FDX) became the latest company to attribute weak earnings and sales to harsh winter weather. The shipping giant announced fiscal third-quarter results that fell short of analysts' expectations, and lowered its outlook for the full fiscal year. (Chicago Tribune)
  3. Call buying took center stage on BlackBerry Ltd (NASDAQ:BBRY) today, as speculators wagered on further upside ahead of earnings.
  4. Groupon Inc (NASDAQ:GRPN) option writers are banking on a layer of support through the next month.
  5. Animation-loving shareholders learned some good news at The Walt Disney Company's (NYSE:DIS) annual meeting yesterday.
EARNINGS

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

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