"The weakness has carried over from Friday," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "It's hard to imagine the S&P 500 Index (SPX) went from a new all-time high to down on the year in just two days, but it happened. Momentum names and technology stocks were the first to crack, and now we're seeing signs that weakness is moving to the overall market." Against this backdrop, the Dow Jones Industrial Average (DJI) blazed a steady path lower as the session progressed, ultimately surrendering 167 points by the close.
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The Dow Jones Industrial Average (DJI - 16,245.87) finished just off its session low, dropping 166.8 points, or 1%. Twenty-three of the Dow's 30 blue chips ended in the red, led by Pfizer Inc.'s (NYSE:PFE) 3% drop. International Business Machines Corp. (NYSE:IBM) paced the advancing minority, tacking on 1.4%. Wal-Mart Stores (NYSE:WMT), meanwhile, finished flat.
The S&P 500 Index (SPX - 1,845.04) swallowed a loss of 20.1 points, or 1.1%, to mark its lowest close since March 14. The broad-market barometer is now in the red for 2014, down 0.2%. The Nasdaq Composite (COMP - 4,079.75) once again fared the worst of the three major benchmarks, concluding its worst three-session drop since 2011. By the close, the tech-rich index retreated 48 points, or 1.2%, to its lowest settlement since Feb. 6.
The CBOE Volatility Index (VIX - 15.57) spent the session in the black, advancing 1.6 points, or 11.5%, to end north of 15.50 for the first time since March 17.
A Trader's Take:
"Technically, the 1,840 level on the SPX has held as support since early March," added Detrick. "With small-caps and tech already breaking all near-term support areas, that is a huge level. Should it give way, another drop could be around the corner." What's more, he said, "If you take a closer look under the hood, things have been deteriorating for a while now. Small-caps and tech have been breaking down all over the place during the past month, with the big blue chips holding tough. Well, now it looks like the last place bulls were hiding is finally starting to crack."
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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