Dow Jones Industrial Average Falls Amid Oil Concerns

Analyst: Stay 'On the Sidelines' Ahead of Huge FDA Decision

Josh Selway

Aug 10, 2016 at 4:31 PM

For the second day in a row, the Dow Jones Industrial Average (DJIA) retraced its early morning lead, this time landing on the wrong side of breakeven. Stocks were punished by falling oil prices, as a surprise increase in domestic crude inventories, as well as reports of record output from Saudi Arabia, sent crude futures spiraling. Meanwhile, with a report on retail sales due out on Friday, more disappointing earnings from retailers only stoked the bearish flames, overshadowing a solid Job Openings and Labor Turnover Survey (JOLTS).

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

Options traders are targeting higher highs for Alibaba Group Holding Ltd (NYSE:BABA) after earnings tomorrow.
One trader's bold six-figure bet on Tesla Motors Inc (NASDAQ:TSLA).
Why these 3 biotechs tanked, and why analysts suggest "staying on the sidelines" ahead of a major FDA decision.
Plus... Layoffs hit a new low, the defense stock selling off, and options traders prepare for more retail earnings.

The Dow Jones Industrial Average (DJIA -18,495.66) fell 37.4 points, or 0.2%, for its second loss of the week. Fourteen of the 30 Dow components closed higher, with Wal-Mart Stores, Inc. (NYSE:WMT) and Walt Disney Co (NYSE:DIS) leading the way with 1.2% gains. The biggest loser was Exxon Mobil Corporation (NYSE:XOM), dropping 1.8%.

The S&P 500 Index (SPX - 2,175.49) closed down 6.3 points, or 0.3%. The Nasdaq Composite (COMP - 5,204.59) also moved lower, dropping 20.9 points, or 0.4%.

The CBOE Volatility Index (VIX - 12.05) added 0.4 point, or 3.3%, for its third straight win.

Indexes closing summary August 10
NYSE and NASDAQ stats August 10

5 Items on Our Radar Today:

The Labor Department's JOLTS report revealed U.S. job openings increased by 110,000 in June. What's more, layoffs dropped to the lowest level since September 2014. (Reuters)
In other economic news, the U.S. Treasury Department said the federal government had a $113 billion budget deficit in July. This marked a nearly $40 billion decline compared to a year earlier. (MarketWatch)
Building the bullish case for Digital Realty Trust, Inc. (DLR)
What caused this defense stock's worst day in almost a year.
Options traders stepped up ahead of Nordstrom, Inc. (NYSE:JWN) earnings.

Quarterly Earnings August 10
Unusual Options Activity August 10
Data courtesy of Trade-Alert

Commodities:

An increase in domestic crude inventories and reports of record output out of Saudi Arabia weighed on oil prices today. September-dated crude futures fell $1.06, or 2.5%, to settle at $41.71 per barrel.

Gold prices got a lift once again as the U.S. dollar continued to ease. December-dated gold picked up $5.20, or 0.4%, to close at $1,351.90 an ounce. Meanwhile, solid vehicle sales in China sparked a 14-month high for palladium, with the September contract surging 4.6% to $726.40 an ounce.

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