"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.
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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.
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:
For a look at today's options movers and commodities activity, head to page 2.
The Case for Big Moves in IWM and QQQ
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