Schaeffer's 43rd Anniversary Stock Picks in 2024

Dow Falls 1,000 Points, Enters Correction Territory as Volatility Ramps Back Up

Stocks are on pace for another huge weekly loss

Feb 8, 2018 at 4:29 PM
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The Dow made another outsized move today, eventually spiraling to a 1,000-point loss and entering correction territory. It was a similar setup on the S&P 500 and Nasdaq, too, which each lost more than 3%. Stocks were again rocked by a big spike in volatility, with the VIX jumping back atop the 30 handle. The risk-off session was sparked by more fears of rising interest rates -- with the 10-year Treasury yield holding near four-year-high territory -- overshadowing strong earnings from high-profile names like Twitter (TWTR). Political uncertainty only added to the bearish backdrop, with Congress still scrambling to pass a short-term spending measure to avoid a government shutdown as the midnight deadline looms.

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

  • A nearly $2 million options bet on the tech sector.
  • The FAANG stock flashing a buy signal after the sell-off.
  • Volatility expectations are historically high on CBOE stock before earnings.
  • Plus, Hertz stock could rally; big options profits from one beer stock; and identifying trader sentiment with options. 

The losses mounted as the day wore on for the Dow Jones Industrial Average (DJI - 23,860.46), eventually settling down 1,032.89 points, or 4.2%. Not a single Dow component closed higher, with American Express (AXP) suffering the biggest loss of 5.6%.

The S&P 500 Index (SPX - 2,581.00) fell 100.66 points, or 3.8%, and the Nasdaq Composite (IXIC - 6,777.16) declined 274.83 points, or 3.9%.

The CBOE Volatility Index (VIX - 33.46) shot up 5.7 points, or 20.7%.

Closing Indexes Summary Feb 8

NYSE and nasdaq Stats Feb 8

5 Items on Our Radar Today

  1. While the Senate appears ready to pass a two-year spending bill to keep the government open, it's not clear if there will be enough support in the House of Representatives to pass. Plus, Senator Rand Paul, R-Ky., is already objecting to the measure, asking Congress to restore budget caps to limit spending. (USA Today)
  2. Walmart is asking vendors for more products priced above $10, as it tries to extract larger profits from its e-commerce business. Unnamed sources told Reuters the retail giant is trying to avoid selling merchandise online for a loss, unlike rival Amazon. (Reuters)
  3. Why Hertz stock could zoom higher.
  4. Put traders made a killing on this beer stock.
  5. Using options to find investor sentiment extremes.

Corporate Earnings Feb 8

Unusual Options Activity Feb 8

Data courtesy of Trade-Alert

Crude Falls For Fifth Straight Session

The price of oil fell for a fifth straight session -- the longest daily losing streak since April. March-dated crude closed down 34 cents, or 0.6%, at $61.45 per barrel.

Gold, on the other hand, got a lift today, thanks to the slide in equities and weakness in the U.S. dollar. April gold futures added $4.40, or 0.3%, to close at $1,319 per ounce.


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