Dow Jones Industrial Average Surrenders 331 on Worries Over Oil, Greece

The euro dropped to a nine-year low against the U.S. dollar

by Alex Eppstein

Published on Jan 5, 2015 at 4:21 PM
Updated on Apr 20, 2015 at 5:32 PM

The Dow Jones Industrial Average (INDEXDJX:DJI) tanked today -- and at one point was down by as much as 357 points -- as crude futures continued to spiral lower. Also contributing to the risk-off attitude among traders is fear that Greece may exit the European Union (EU) -- especially if the Syriza party wins the upcoming presidential election -- which dragged the euro to a nine-year low against the U.S. dollar. The S&P 500 Index (SPX) and Nasdaq Composite (COMP) fared little better than their blue-chip counterpart; however, the CBOE Market Volatility Index (VIX) soared, landing at its highest perch in more than two weeks.

Continue reading for more on today's market, including:

  • How options traders responded to Herbalife Ltd.'s (NYSE:HLF) analyst-induced meltdown.
  • These GoPro Inc (NASDAQ:GPRO) call buyers are banking on an end-of-week rally, following the company's appearance at the Consumer Electronics Show (CES) tomorrow.
  • A major pharmaceutical deal sent this stock soaring to a record high.
  • Plus ... Stagnation in Germany, a look at December auto sales data, and a pair of e-commerce laggards capture bullish attention.

The Dow Jones Industrial Average (DJI - 17,501.65) spent the entire session in the red, and was off nearly 360 points at its intraday low. At the close, the blue-chip index was still sharply south of breakeven, down 331.3 points, or 1.9% -- its worst session in three months. Not surprisingly, 28 of the Dow's 30 components settled lower, paced by Caterpillar Inc.'s (NYSE:CAT) 5.3% deficit. The only outliers were Merck & Co., Inc. (NYSE:MRK) -- which gained 1.5% -- and The Coca-Cola Co (NYSE:KO), which ended flat.

Along similar lines, the S&P 500 Index (SPX - 2,020.58) and Nasdaq Composite (COMP - 4,652.57) opened in the red and never made it above breakeven. By the close, the SPX gave back 37.6 points, or 1.8%, while the COMP surrendered 74.2 points, or 1.6%.

The CBOE Volatility Index (VIX - 19.92) soared as U.S. equities sold off. The market's "fear gauge" ended with a 2.1-point, or 12%, gain, to reach its highest closing mark since Dec. 16.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

5 Items on Our Radar Today:

  1. Germany's inflation rate slowed to 0.1% last month, marking the weakest reading since October 2009. Economists had expected a 0.2% rate. This development puts additional pressure on the European Central Bank (ECB) to intervene in order to prevent a "deflationary spiral," which could ripple through the eurozone. (Bloomberg)
  2. Falling fuel prices boosted U.S. auto sales last month, with General Motors Company (NYSE:GM) logging its best December since 2008 -- up 19% year-over-year. However, rival Ford Motor Company (NYSE:F) saw sales grow just 1%, falling short of estimates. (CNBC)
  3. Two e-commerce stocks that have been popular with call buyers, despite their technical struggles.
  4. This Dow component got clobbered as crude continued to swoon.
  5. Options traders employed two different strategies to bet against Tesla Motors Inc (NASDAQ:TSLA).

For a look at today's options movers and commodities activity, head to page 2.

STOCKS – NOTABLE CALL ACTIVITY

STOCKS – NOTABLE PUT ACTIVITY

Commodities:

Crude's slump continued today, with the February-dated contract settling at its lowest level since April 2009, amid ongoing oversupply concerns -- exacerbated by ConocoPhillips' (NYSE:COP) announcement that it has struck oil at its Norwegian North Sea project. In fact, liquid gold at one point dipped below the round-number $50 level, before settling at $50.04 per barrel -- down $2.65, or 5%.

Gold rebounded back above the $1,200 level as traders targeted safe-haven investments amid the energy sell-off, as well as the uncertain future of Greece in the EU. By day's end, the February-dated contract had added $17.80, or 1.5%, to settle at $1,204 per ounce.


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