Fed Fears Send Dow Jones Industrial Average Tumbling

Dow Drops, Financials Rally; Plus, Is Tesla Headed for Record Highs?

by Karee Venema

Published on Jun 5, 2015 at 4:30 PM

The Dow Jones Industrial Average (DJIA) took a sharp plunge at the open, as Wall Street wondered if today's jobs data might lead to a June rate hike. The blue-chip barometer briefly fought its way back -- and peaked above breakeven at one point -- only to fizzle once again, ending the day and the week in the red. What's more, the 30-stock index notched its first weekly close south of 18,000 since mid-April.

Traders also kept a close eye on bond yields and the dollar -- which were both on the rise -- as well as the latest developments overseas. Specifically, Greece Prime Minister Alexis Tsipras called international creditors' bailout proposals "absurd." Looking ahead, inflation data is due next week, and Apple Inc. (NASDAQ:AAPL) should garner its fair share of attention, with the tech titan kicking off its highly anticipated developers conference.

 

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

 

 

The Dow Jones Industrial Average (DJIA - 17,849.46) spent time on both sides of breakeven today -- tracking a nearly 118-point range -- and eventually closed with a 56.1-point, or 0.3%, loss. Twenty of the Dow's 30 components finished in the red, led by Verizon Communications Inc.'s (NYSE:VZ) 1.8% drop. JPMorgan Chase & Co. (NYSE:JPM) paced the eight advancers with its 1.6% gain, while Walt Disney Co (NYSE:DIS) was unchanged. On a weekly basis, the DJIA surrendered 0.9%.

 

The S&P 500 Index (SPX - 2,092.83) hit both its intraday high and low before 11 a.m. ET, settling with a 3-point, or 0.1%, deficit. The Nasdaq Composite (COMP - 2,092.83), meanwhile, outperformed its peers by adding 9.3 points, or 0.2%. Week-over-week, the SPX and COMP dropped 0.7% and 0.03%, respectively.

 

The CBOE Volatility Index (VIX - 14.21) shed 0.5 point, or 3.4%, but maintained a perch atop its 80-day moving average. For the week, the market's "fear gauge" rose 2.7%.

 

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5 Items on Our Radar Today:

 

  1. The Labor Department said the U.S. added 280,000 jobs last month -- the most in five months. Meanwhile, the unemployment rate ticked up to 5.5% from 5.4%, and hourly wages rose 0.3%. (The New York Times)
  2. New York Fed President William Dudley said interest rates are more than likely to rise this year, if certain economic conditions -- including the labor market and inflation -- improve. However, he cautioned that "there remains some uncertainty about whether growth will be strong enough to lead to further improvement in the labor market." (Bloomberg)
  3. Solar stocks had a huge day, thanks to reports of a private buyout bid for one component, and remarks on overseas regulatory action by another.
  4. Keurig Green Mountain Inc (NASDAQ:GMCR) and Starbucks Corporation (NASDAQ:SBUX) gained ground, perhaps thanks to a blowout IPO from sector peer DAVIDsTEA Inc. (NASDAQ:DTEA).
  5. Option bulls continue to target GoPro Inc (NASDAQ:GPRO) amid the stock's uptrend.

 

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Commodities:

 

Crude oil edged higher today, as a 26th straight weekly drop in active U.S. oil rigs overshadowed the Organization of the Petroleum Exporting Countries' (OPEC) decision to keep its output levels unchanged. By the close, crude for July delivery was up $1.13, or 2%, at $59.13 per barrel. On the week, however, crude lost 1.9%.

 

Today's strong jobs data and a strengthening dollar sent gold futures tumbling, with the August-dated contract down $7.10, or 0.6%, to finish at $1,168.10 an ounce -- its lowest settlement since March 19. On a week-over-week basis, the malleable metal gave back 1.8%, its third straight weekly loss.

 


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