Energy Rout Smacks Dow Jones Industrial Average Lower

Crude oil closed at its lowest mark since April 2009

by Karee Venema

Published on Jan 12, 2015 at 4:19 PM
Updated on Jun 24, 2020 at 10:16 AM

It was another volatile day on Wall Street, with the Dow Jones Industrial Average (INDEXDJX:DJI) trading in a roughly 222-point range. By the time the dust settled, the blue-chip barometer had narrowly avoided a second-consecutive triple-digit loss, following sharp drops in Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM). Specifically, investors were reacting to a downwardly revised oil-price outlook from Goldman Sachs, which sent crude -- and energy stocks -- reeling. Elsewhere, traders are bracing for the start of fourth-quarter earnings season, which unofficially gets underway tonight when Alcoa Inc (NYSE:AA) steps up to the plate.

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

Despite a brief foray north at the open, the Dow Jones Industrial Average (DJI - 17,640.84) spent the majority of the session south of breakeven, eventually closing down 96.5 points, or 0.5%. Twenty-two of the DJI's 30 components stumbled, led by CVX's 2.2% plunge. DuPont's (NYSE:DD) 1.2% gain paced the eight advancers.

The S&P 500 Index (SPX - 2,028.26) also ticked higher out of the gate, but quickly reversed course to settle with a 16.6-point, or 0.8%, loss. The Nasdaq Composite (COMP - 4,664.71), meanwhile, surrendered 39.4 points, or 0.8%.

Although the CBOE Volatility Index (VIX - 19.60) continued to move higher -- adding 2.1 points, or 11.7% -- the market's "fear gauge" ran into resistance near the round-number 20 mark.

CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

5 Items on Our Radar Today:

  1. On the heels of last week's dovish comments by Chicago Fed President Charles Evans , Atlanta Fed President Dennis Lockhart took the podium today, saying he expects the central bank will likely boost interest rates "by the middle of the year." Although failing to give a specific timeline, Lockhart cited an improving economy for his outlook, but cautioned the importance of, "Inflation readings and forecasts ... in deciding when to begin adjusting policy." (MarketWatch)
  2. U.S. Central Command said its Twitter and YouTube accounts were hacked earlier, with signs suggesting the attack came at the hands of ISIS. The incident occurred shortly after President Barack Obama outlined his newest cybersecurity proposals in D.C. The news sent shares of cybersecurity firm FireEye Inc (NASDAQ:FEYE) soaring -- and call players flooding the equity's options pits. (Bloomberg; CNBC)
  3. News that General Motors Company (NYSE:GM) will throw its hat in the electric car ring may have put TSLA at risk of a bullish backlash.
  4. SanDisk Corporation (NASDAQ:SNDK) got slapped with a pair of bearish brokerage notes , after the company offered up an uninspiring revenue outlook.
  5. Goldman Sachs was quick to weigh in on a number of energy names today, but for sector component Chesapeake Energy Corporation (NYSE:CHK), the news wasn't all that bad.

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 oil extended its decline today, after Goldman Sachs lowered its short- and long-term price forecasts for liquid gold. By the close, February-dated crude was down $2.29, or 4.7%, to settle at a fresh five-year low of $46.07 per barrel.

Gold continued to benefit from a weaker dollar, as well as its "safe haven" status, with gold for February delivery adding $16.70, or 1.4%, to finish at $1,232.80 per ounce -- its loftiest settlement since Oct. 22.


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