The trading year suffers its first significant drop as the Dow Jones Industrial Average (DJIA) is hit for 245 points amid downbeat news from Intel Corp (INTC) and Alcoa Inc (AA). At its lows, the Dow was down nearly 300 points but a look to the intraday chart shows a last-minute bout of buying gave the average a small boost. The S&P 500 (SPX), Nasdaq Composite (COMP), and Russell 2000 (RUT) all posted losses of at least 3%.
The midday check of the action showed widespread selling and the persisted into the close as the iShares Treasury Bond (TLT) showed the only gain. The US Oil Fund (USO) was especially weak as it lost over 10%. The Amex Gold Bugs Index (HUI) was hit for more than 8%. Most groups lost more than 2% and a number lost over 4%.
Earlier this week offered some perspective on the daily charts of the broad market indices and noted the near-term uptrends. After today's selloff, we will get a chance to see how strong the underlying demand is. The uptrends are still intact, but a hard day of selling tomorrow would break the simple trendlines shown below. As I said Monday, a breakdown in the near-term trend would make the recent lows the major level to watch. And that is where I will pick up in the morning. Have a nice evening.
Chart Courtesy of Thomson Financial
| Index |
Index Value |
Point Change |
Percent Change |
| S&P 500 (SPX) |
906.7 |
-28.1 points |
-3.00 percent |
| Dow Jones Industrial Average (DJIA) |
8769.7 |
-245.4 points |
-2.72 percent |
| Nasdaq Composite (COMP) |
1599.1 |
-53.3 points |
-3.23 percent |
| Russell 2000 (RUT) |
497.1 |
-17.6 points |
-3.42 percent |
| CBOE Market Volatility Index (VIX) |
43.39 |
4.83 points |
12.5 percent |
Charts Courtesy of Thomson Financial
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