Dow Jones Industrial Average Takes a Dive; Retail In Focus

The Surprising Post-Election Shift On Bank Stocks

Josh Selway
Jan 5, 2017 at 12:03 PM
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The Dow Jones Industrial Average (DJIA) has taken a sharp turn lower at midday, down triple digits as stocks struggle following a flurry of economic data. While traders make sense of mixed reports from the jobs front ahead of tomorrow's nonfarm payrolls report, Institute for Supply Management's (ISM) non-manufacturing index for December remained at an annual high. Elsewhere, retail stocks are selling off in light of ugly holiday sales from Kohl's Corporation (NYSE:KSS) and Macy's Inc (NYSE:M). The Dow is now set to snap a two-day win streak, taking a breather from its hunt for the 20,000 level.

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

Midday Market Stats Jan 5

Among the stocks with unusual option volume at midday is upscale designer Coach Inc (NYSE:COH). While sentiment has mostly been bearish toward the shares in recent weeks, and retail stocks are suffering a sector swoon, COH call volume is exploding today, with the contracts trading at 27 times the expected pace for this point in the day. The vast majority of the action has taken place at the weekly 2/10 36-strike call, where it seems safe to assume buy-to-open activity is taking place. As such, COH option bulls are betting on an upward move from the stock over the next month. The shares were last seen 3.2% lower at $35.06. 

Over on the Big Board, tool specialist Stanley Black & Decker, Inc. (NYSE:SWK) is outperforming, adding 2.3% to trade at $119.14, thanks to news the company will buy Sears Holdings Corp's (NASDAQ:SHLD) Craftsman tool brand. The move puts the stock up 17.6% year-over-year, and back above the fast-rising, and historically supportive, 200-day moving average. 

Daily Chart of SWK Jan 5

Meanwhile, the sector-wide headwinds have retailer Nordstrom, Inc. (NYSE:JWN) near the bottom of the NYSE, last seen 8.9% lower at $44.58. Historically speaking, this move lower is unusual for JWN, with the shares breaching their historically supportive 160-day moving average. 

 The CBOE Volatility Index (VIX) is up 0.2 point, or 1.5%, at 12.03.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.97, with put volume nearly doubling call volume. The SPY is down 0.7 point, or 0.3%, at $225.87. 

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