Dow Jones Industrial Average Takes a Breather After Yellen Testimony

Inside This $470K Bet Against Disney

by Alex Eppstein

Published on Nov 4, 2015 at 4:19 PM

The Dow Jones Industrial Average's (DJIA) hot start to November cooled off, as traders digested a sharp decline in crude oil and Fed Chair Janet Yellen's latest comments. Specifically, the central bank official said a December rate hike remains a "live possibility," essentially reiterating the message from last week's post-meeting Fed statement. Elsewhere, it was a mixed day for data, as traders weighed reports on the trade deficit, the services sector, and private-sector employment -- the latter of which was closely dissected ahead of Friday's key nonfarm payrolls report.

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The Dow Jones Industrial Average (DJIA - 17,867.58) reversed lower after initial gains, settling on a loss of 50.6 points, or 0.3% -- and ending a two-day win streak. Half of the 30 Dow components advanced, led by a 0.8% gain at Merck & Co., Inc. (NYSE:MRK). UnitedHealth Group Inc (NYSE:UNH) led a pack of 15 blue-chip laggards, shedding 2.6%.

The S&P 500 Index (SPX - 2,102.31) slipped 7.5 points, or 0.4%, and nearly gave up its newly found foothold atop the round 2,100 level. The Nasdaq Composite (COMP - 5,142.48) slid 2.7 points, or 0.05%, following a seesaw session.

The CBOE Volatility Index (VIX - 15.51) tacked on 1 point, or 6.7%, to end above its 10-day moving average for just the second time since late September.



5 Items on Our Radar Today:

  1. New York Fed President William Dudley echoed Yellen's hints at a possible December rate hike, adding that the central bank must also consider the "micro-level" economic data, not just the national unemployment rate, before making a decision. (Economic Times)
  2. According to Tesla Motors Inc (NASDAQ:TSLA) and SpaceX CEO Elon Musk, fully autonomous cars will be the norm within 15-20 years. Owning a tradition automobile, he says, will soon "be like owning a horse." (USA Today, via CNBC)
  3. Groupon Inc (NASDAQ:GRPN) took a heavy hit after a weak 2016 forecast and a CEO resignation
  4. This drug company can't seem to keep its name out of the news lately, and now joins others in facing a U.S. Senate probe into inflated pricing
  5. Two days after announcing a major acquisition, Visa Inc (NYSE:V) continued climbing the charts





December-dated crude oil lost most of Tuesday's gains, due to a strong dollar and a sixth straight week of rising U.S. inventories. An Organization of the Petroleum Exporting Countries (OPEC) document pointing to lower demand in the coming years also fueled the bearish outlook for oil. By the close, the contract lost $1.58, or 3.3%, to sit at $46.32 a barrel. 

A rising dollar and continued speculation over a December rate hike, particularly after Yellen's testimony, kept gold heading lower for a fifth straight day. December gold futures hit a new one-month low, falling $7.90, or 0.7%, to close at $1,106.20 an ounce.

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