Oil and options expiration are conspiring against the DJIA
It's been a volatile week for the Dow Jones Industrial Average (DJIA), with the Fed and oil fueling five consecutive triple-digit moves in both directions. It could be No. 6 for the blue-chip index today, with the Dow swimming in red ink for a second straight session as oil continues to explore new lows. Exacerbating selling pressure -- and erasing most of the major indexes' weekly gains -- is quadruple witching expiration, a rough day overseas, and a potential exodus ahead of the holiday-shortened week.
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Among the stocks with elevated put volume is package delivery concern United Parcel Service, Inc. (NYSE:UPS), with the contracts crossing the tape at four times the average intraday rate. UPS has been sliding since a mid-October bear gap, and plummeted last week amid reports it's struggling to keep up with holiday volume. The shares today have dropped 2.4% to $97.61, due to a negative analyst note, and it seems short-term option traders are betting on more downside next week, buying to open the weekly 12/24 96.50-strike puts.
One the notable losers on the New York Stock Exchange is trucking issue Knight Transportation (NYSE:KNX), which has plummeted 6.8% to $22.85, and is just off a new annual low of $21.72. Pressuring the shares is a downwardly revised current-quarter outlook, as well as a bearish backlash from analysts. KNX has now lost roughly one-third of its value in 2015, pressured by its 10-month moving average.
Among the top performers on the Big Board is Darden Restaurants, Inc. (NYSE:DRI), which is up 5.4% at $61.52, after the Olive Garden parent hiked its full-year profit and same-store sales guidance. The firm also lifted its quarterly dividend by 14%, and announced a fresh $500 million share-buyback plan. Against this backdrop, DRI is on pace to end December atop its 10-month trendline for the first month in three.
The CBOE Volatility Index (VIX) is up 0.7 point, or 3.5%, at 19.60.
Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.25, with puts outnumbering calls. However, SPY calls are trading at twice the normal intraday pace, due to options expiration. SPY was last seen 1.6 points, or 0.8%, lower at $202.04.