Crude, Caterpillar Crush Dow Jones Industrial Average

What Friday's VIX Implosion Means for Stocks

by Alex Eppstein

Published on Jan 25, 2016 at 12:00 PM
Updated on Jan 25, 2016 at 12:02 PM

Following last week's strong finish, the Dow Jones Industrial Average (DJIA) is attempting to recover from an early triple-digit loss, sparked by fresh weakness in oil prices -- with March crude futures last seen 4.5% lower at $30.75 per barrel. Dow component Caterpillar Inc. (NYSE:CAT) is also leading the index south in the wake of a bearish Goldman Sachs note. CAT's loss of more than 4% is offsetting post-earnings gains and a record high at fellow blue chip McDonald's Corporation (NYSE:MCD). Elsewhere, the Dallas Fed manufacturing survey tanked to its lowest level since April 2009, with the Texas economy crippled by energy weakness.

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Among the stocks with unusual put volume today is tech firm NCR Corporation (NYSE:NCR), with the contracts trading at 13 times the expected intraday rate. The most active strike is the out-of-the-money March 17 put, which may be seeing buy-to-open activity. At last check, NCR is 2.1% higher at $20.96.

The biggest loser on the Nasdaq is drugmaker Oncomed Pharmaceuticals Inc (NASDAQ:OMED), following a downbeat drug update, as well as a downgrade to "market perform" and a price-target cut to $11 at Leerink. At last check, the shares have plunged almost 46% to trade at $9.54, and are fresh off a record low of $9.15.

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One of the noteworthy winners on the Big Board is precious metals producer Barrick Gold Corporation (USA) (NYSE:ABX), up 6.2% at $9.11. Strength in gold futures continues to boost the commodity stock, amid a weaker dollar and global economic worries.

The CBOE Volatility Index (VIX) is up 0.8 point, or 3.5%, at 23.13.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.49, with puts easily outstripping calls. At last check, SPY is off 1.5 points, or 0.8%, at $189.00.


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