"The headlines may tell you that a slowdown in China was the driver for the market's biggest drop since June," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "I'm not totally buying that, but whatever the true reason -- China, emerging market currencies, weak U.S. economic data, a blah earnings season so far, or simply it is time for a break -- the bears took charge today in a big way." The Dow Jones Industrial Average (DJI) moved sharply lower, losing its grip on the psychologically significant 16,000 mark and turning in a weekly loss of 3.5%.
Continue reading for more on today's market, including:
The Dow Jones Industrial Average (DJI - 15,879.11) suffered a triple-digit decline for the second day in a row, bringing an end to its worst week since May 2012. By the time the closing bell mercifully sounded, the blue-chip index was at its intraday low, down 318.2 points, or nearly 2%, closing south of 16,000 for the first time since Dec. 17. Week-over-week, the Dow dropped 3.5%. Just three Dow components managed to move higher on the day, including Microsoft Corporation (NASDAQ:MSFT), which added 2.1%. General Electric Company (NYSE:GE) brought up the rear, shedding 3.4%.
Things weren't much better for the S&P 500 Index (SPX - 1,790.29) which ended below the 1,800 mark for the first time since Dec. 17. On the day, the SPX logged a drop of 38.2 points, or 2.1%. The Nasdaq Composite (COMP - 4,128.17) shed 90.7 points, or 2.2%. The SPX lost 2.6% for the week, while the COMP surrendered 1.7%.
The CBOE Volatility Index (VIX - 18.14) spiked 4.4 points, or 31.7%, to settle at its highest level since Oct. 15. This week, the market's fear barometer added a whopping 45.8%.
A Trader's Take:
"Sure this week was ugly, and will go down as one of the worst weeks in a long time," Detrick said. "The one 'positive' for the bulls is the SPX is now down two weeks in a row. It hasn't been lower three weeks in a row for 88 straight weeks. Going back 40 years, this record is second only to 107 weeks that ended back in 1996. In other words, the bulls have consistently stepped up in this situation, and the last week of January is historically rather bullish. The bottom line is: we could get a much better feel for this sell-off after next week is in the books."
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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