Crude Crash Sends Dow Jones Industrial Average Sharply Lower

Crude oil hit a new five-year low in today's trading

Jan 5, 2015 at 11:43 AM
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Crude oil fell to a fresh five-year low of $50.13 per barrel earlier, prompting a steep sell-off in the broader equities markets. In fact, the Dow Jones Industrial Average (INDEXDJX:DJI) is off more than 229 points, or 1.3%, with oil-and-gas names Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) helping to lead blue-chips lower. Elsewhere on the charts, both the S&P 500 Index (SPX) and Nasdaq Composite (COMP) are down a respective 1.4% and 0.9%, while the Russell 2000 Index (RUT) is testing short-term support in the 1,180-1,190 region.

Continue reading for more on today's market -- and don't miss:

Midday Market Stats

Among the stocks with notable call volume is drugmaker Conatus Pharmaceuticals Inc (NASDAQ:CNAT). The stock is up 24% at $10.03, as traders buy into the biotech ahead of this Thursday's round of clinical trial results. In the options pits, calls are crossing the tape at a rate 13 times the intraday average, and according to the stock's 30-day at-the-money implied volatility -- which has jumped to an annual high of 213% -- short-term contracts are in high demand. In fact, four out of five of CNAT's most active options are calls that expire in the January series, with possible buy-to-open activity detected at the 12.50 strike.

For more midday statistics and stocks on the move, head to page 2.

Oil-and-gas issue Seadrill Limited (NYSE:SDRL) is one of the biggest laggards on the Big Board today, down 8.8% at $10.95 amid a sector-wide sell-off. Today's negative price action is just more of the same for a stock that's shed nearly 73% over the past 52 weeks. What's more, the equity's 10- and 20-day moving averages appear to be on the verge of forming a bearish cross, meaning a fresh layer of resistance could be forming -- music to the ears of option bears.

Daily Chart of SDRL Since June 2014 With 10- and 20-Day Moving Averages

Metals recycler Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) is one of the major losers on the Nasdaq, after D.A. Davidson cut its outlook on the shares to "neutral" from "buy," and slashed its price target by $9 to $25 ahead of Thursday's early morning earnings report. At last check, the stock was off 8.5% at $20.14 -- a new six-year low. Year-over-year, the shares have surrendered more than 35% of their value, and short sellers are gambling on more downside. Currently, short interest accounts for 11.9% of the equity's available float, and it would take two weeks to cover these bearish bets, at SCHN's average daily pace of trading.

The CBOE Volatility Index (VIX) is 3.2 points, or 17.7%, higher at 20.94, and is on pace for its loftiest daily close since Dec. 16.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.91, with puts nearly doubling calls. At last check, SPY is down 3.1 points, or 1.5%, at $202.36.

 

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