Crude Oil Sinks Dow Jones Industrial Average; Nasdaq Extends Hot Streak

The Dow Jones Industrial Average (DJIA) kicked off a historically bearish month on a weak note, as stocks were pressured by flagging oil prices and disappointing economic reports. Specifically, crude fell to a multi-month low, and while the Institute for Supply Management (ISM) manufacturing index showed expansion in July, activity fell shy of estimates. However, that didn't stop the broader S&P 500 Index (SPX) and tech-heavy Nasdaq Composite (COMP) from notching new highs, with the latter extending its winning streak to five days.

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

• Our founder and CEO Bernie Schaeffer considers whether the extreme CBOE Volatility Index (VIX) discount is cause for concern.
• While this solar stock slumped, its red-hot sector peer was bombarded by option bulls.
• Are higher highs ahead for this discount retailer?
• Plus... Southwest CEO under siege, construction spending drops, and 2 stocks seeing pre-earnings volatility spikes.
  

The Dow Jones Industrial Average (DJIA - 18,404.51) shed 27.7 points, or 0.2%, bringing its losing streak to six consecutive sessions. Fourteen of the Dow's 30 stocks ended in the green, with Apple Inc. (NASDAQ:AAPL) leading the way, up 1.8%. Another 15 blue chips fell -- with Exxon Mobil Corporation (NYSE:XOM) the worst off, down 3.5% -- while Merck & Co., Inc. (NYSE:MRK) was flat.

The S&P 500 Index (SPX - 2,170.84) dipped 2.8 points, or 0.1%, despite earlier hitting a record intraday high of 2,178.29. The Nasdaq Composite (COMP - 5,184.20) outperformed its peers, adding 22.1 points, or 0.4%, and settling at an annual closing high.

The CBOE Volatility Index (VIX - 12.44) popped 0.6 point, or 4.8%, snapping its three-session losing streak in the process.

5 Items on Our Radar Today: 

1. Southwest Airlines Co's (NYSE:LUV) pilots union has called for CEO Gary Kelly to be replaced, blaming his "misguided focus" on the airline's costs and stock performance. "We can no longer sit idly by and watch poor decision after poor decision deeply affect our customers and Southwest Airlines," said union president Jon Weaks in a statement. (Bloomberg)
2. Construction spending unexpectedly dropped 0.6% in June, according to the Commerce Department, suffering its third consecutive monthly decline. Economists had forecast constructing spending to rise 0.5%. (Reuters, via CNBC)
3. Pre-earnings volatility expectations are soaring on these 2 stocks.
4. Short sellers cheered as this biotech melted down, but got burned by another drugmaker.
5. According to Baird, Tesla Motors Inc's (NASDAQ:TSLA) "strong technological innovation" may be a reason to buy on weakness.

Data courtesy of Trade-Alert

Commodities:

Crude oil briefly breached the $40-per-barrel level in intraday trading, after a recent survey revealed record output among members of the Organization of the Petroleum Exporting Countries (OPEC). September-dated crude lost $1.54, or 3.7%, to settle at $40.06 per barrel -- its lowest close since late April. 

Gold edged higher amid the release of lackluster economic data, and as some traders bank on the Fed delaying its next interest rate hike beyond September. At the close, December-dated gold was up $2.10, or 0.2%, to land at $1,359.60 per ounce. Meanwhile, September-dated silver ended at a two-year high, adding 15 cents, or 0.7%, to settle at $20.50 an ounce.

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