Dow Jones Industrial Average Drops 372 as Stocks Get Smoked

Stocks Slaughtered; Options Traders Drop Millions on Gold

May 17, 2017 at 4:30 PM
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The Dow Jones Industrial Average (DJIA) got destroyed today, dropping well over 300 points for its worst loss in eight months. Traders fled stocks amid reports President Donald Trump instructed fired FBI director James Comey to back off his investigation of former national security adviser Michael Flynn, raising concerns about impeachment and Trump's ability to enact his pro-business agenda. Gold prices surged amid a mad dash to "safety," and the dollar plummeted, while the CBOE Volatility Index (VIX) -- or the market's "fear gauge" -- saw its largest single-day rise since the Brexit backlash in June. The Nasdaq Composite (COMP) and S&P 500 Index (SPX) followed the Dow deep into the red, with financial stocks in particular suffering heavy losses. 

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

  • Two 7-figure options trades on gold. 
  • Why Walmart earnings shouldn't scare away options traders. 
  • The drug news that sent this biotech stock to the top of the Nasdaq. 
  • Plus, a stock that should be higher; why Disney was downgraded; and the latest Qualcomm-Apple drama. 

The Dow Jones Industrial Average (DJIA - 20,606.93) closed the day down 372.82 points, or 1.8%, ending below its 80-day moving average for the first time since the election. Just five of 30 Dow components closed in the black, led by UnitedHealth stock, which added 0.5%. The blue-chip bank stocks, JPMorgan and Goldman Sachs, had the worst days, dropping 3.8% and 5.3%, respectively. 

The S&P 500 Index (SPX - 2,357.03) breached its 50-day for the first time since April 21, losing 43.6 points, or 1.8%. The Nasdaq Composite (COMP - 6,011.68) dropped 158.20 points, or 2.6%. It was the worst day for the SPX since September, and the Nasdaq's steepest percentage slide since June 24.

The CBOE Volatility Index (VIX - 15.59) surged 4.9 points, or 46.4%, for its highest close since April 13. 

Closing Indexes Summary May 17

NYSE and Nasdaq Stats May 17


5 Items on Our Radar Today:
  1. House Oversight Chairman Jason Chaffetz, a Republican from Utah, has invited fired FBI director James Comey to testify before Congress next Wednesday. Comey has yet to officially accept the invite, but reports suggest he wants to testify publicly as soon as possible. (Politico)
  2. Alphabet's Google earlier announced it will be releasing a standalone virtual reality headset later this year. They did not reveal a price for the product. (Bloomberg)
  3. Analysts: There is "no clear fundamental reason" for this stock to be selling off. 
  4. 2 reasons for today's Disney stock downgrade. 
  5. The latest in the ongoing QUALCOMM-Apple drama. 

Corporate Earnings May 17
Unusual Options Activity May 17
Data courtesy of Trade-Alert

Commodities

Another drop in U.S. crude inventories -- the sixth straight weekly decrease -- pushed oil prices higher today. By the close, June-dated crude futures were up 41 cents, or 0.8%, at $49.07 per barrel. 

Gold prices enjoyed a big day amid the stock and dollar sell-off, with June-dated futures notching their highest close of the month and a sixth straight win. Gold for June delivery added $22.30, or 1.8%, to end at $1,258.70 per ounce. 

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