Dow Jones Industrial Average Drops 162; Fed Leak Rocks Street

Why Shorts Can't Touch These Ice-Cold Energy Stocks

Aug 19, 2015 at 4:26 PM
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Despite a valiant attempt to claw its way into the black, the Dow Jones Industrial Average (DJIA) ended in the red -- though well off its intraday low. The blue-chip barometer was down roughly 230 points at one point -- pressured by a global stock rout and crude oil's demise -- but pared its losses after the premature release of the Federal Open Market Committee (FOMC) July meeting minutes. The report showed that most central bankers think the environment suitable to a rate hike -- the first in almost a decade -- is "approaching," underscoring expectations for a September lift. Against this backdrop, other major indexes trimmed their deficits by the close, and if history is any guide, the S&P 500 Index (SPX) could be volatile tomorrow.


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



The Dow Jones Industrial Average (DJIA - 17,348.73) was down about 229 points at its intraday low, and peeked above breakeven after the Fed release, but settled on a loss of 162.6 points, or 0.9%. Just three Dow components avoided the red -- McDonald's Corporation (NYSE:MCD) added 0.3%, Nike Inc (NYSE:NKE) edged 0.1% higher, and Merck & Co., Inc. (NYSE:MRK) finished flat. Oil issue Chevron Corporation (NYSE:CVX) paced the losing majority with a 3% drop.


The S&P 500 Index (SPX - 2,079.61) also inched closer to breakeven in post-Fed action, but couldn't break into the black, ending 17.3 points, or 0.8%, lower. The Nasdaq Composite (COMP - 5,019.05) dipped beneath the key 5,000 level around midday -- and spent a minute in positive territory after the Fed minutes -- before ending on a loss of 40.3 points, or 0.8%.


The CBOE Volatility Index (VIX - 15.25) pared its lead after the Fed release, but added 1.5 points, or 10.6%, by the close -- marking its highest settlement and first close above its 200-day trendline since July 27.






5 Items on Our Radar Today:


  1. The Fed's highly anticipated meeting minutes were released around 1:45 p.m. ET (15 minutes early), after Bloomberg inadvertently broke the embargo. Last month, the central bank accidentally published confidential staff forecasts, usually withheld five years.  (MarketWatch) 
  2. Consumer prices rose by less than expected in July, but still edged higher for a sixth straight month. The Labor Department's consumer price index (CPI) and core CPI -- which excludes volatile food and energy -- both ticked 0.1% higher. (Reuters​)
  3. This solar name was one of the biggest SPX-listed losers of the day.
  4. Why GoPro Inc (NASDAQ:GPRO) bears were out in full force.
  5. What helped Google Inc (NASDAQ:GOOGL) buck the trend lower.









Crude oil plummeted to a new six-year low, due to a surprise increase in domestic inventories. By the close, September-dated oil -- which expires tomorrow -- was down $1.82, or 4.3%, at $40.80 per barrel, marking its lowest settlement since March 2009.


On the other hand, the stars aligned for gold today. A cooling dollar and a stock sell-off helped December-dated gold to a gain of $11, or 1%, to finish at $1,127.90 an ounce. What's more, gold extended its lead in after-hours trading, following the Fed minutes. 


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