Plunging Oil Sparks Panic; Dow Jones Industrial Average Drops 460

Dow Surrenders 460; Plus, 3 Travel Stocks to Buy?

by Karee Venema

Published on Jan 20, 2016 at 12:10 PM

Bears have forcefully regained control of the market today, with the Dow Jones Industrial Average (DJIA) staring at a 400-plus-point loss at midday -- and easily surrendering its short-lived perch atop 16,000. Things aren't much better for the S&P 500 Index (SPX) and Nasdaq Composite (COMP), either, with the former lingering near levels not seen since October 2014 and the latter down nearly 3%. The CBOE Volatility Index (VIX), meanwhile, is beginning to show signs of life -- up 14.3%.

Sparking the day's sell-off is a steep drop in oil -- which also sent global markets tumbling -- with February crude futures sinking to 12-year lows on concerns of a global supply glut. Disappointing earnings from a handful of big-cap names are only exacerbating the selling pressure, with International Business Machines Corp. (NYSE:IBM) and Goldman Sachs Group Inc (NYSE:GS) wallowing in red ink following their respective results. 

Continue reading for more on today's market -- and don't miss:

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Among the stocks with unusual call volume today is General Electric Company (NYSE:GE), with the contracts crossing at 14 times the average intraday pace. According to Trade-Alert, the majority of the action is apparently a result of one trader closing a January 2017 30-35 long call spread ahead of the company's turn in the earnings confessional later this week. Most recently, the blue chip was off 3.3% at $27.55.

Wynn Resorts, Limited (NASDAQ:WYNN) is one of the leading laggards on the S&P 500 Index today. It's already been a tough year for the shares, thanks in part to disappointing casino data out of Macau, with WYNN down 23% in 2016. Today, the shares are off 10.2% at $53.16, but finding support in the $50-$52 region -- an area that's helped contain pullbacks since October. ​

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Microchip Technology Inc. (NASDAQ:MCHP), meanwhile, is bucking the day's bearish bias -- up 2.5% at $42.72 -- after the firm announced plans to buy Atmel Corporation (NASDAQ:ATML). In addition, B. Riley followed in the recent footsteps of Morgan Stanley, and raised its price target on the semiconductor stock to $61.50 -- never-before-seen territory.

The CBOE Volatility Index (VIX) is up 3.7 points, or 14.3%, at 29.78.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.57, with puts outpacing calls. What's more, SPY put volume is running at nearly twice the average intraday rate. SPY is off 2.6% at $183.21, and south of this critical area.


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