Daily Rundown, July 7
A bearish underlying tone returned Tuesday morning. With no economic data on the calender and no earnings of broad market significance, the Dow Jones Industrial Average opened modestly lower and gave back much of the 44-point gain from the day before.
Energy related stocks are the weakest after crude oil gave up early gains and move into negative territory. Crude has been under pressure amid mounting anxiety about the economic outlook, which became more intense Thursday when jobs data showed a bigger than expected decline in June payrolls.
Crude is down more than $1 and approaching $63 a barrel. Gold is little changed near $925 an ounce.
Some pre-earnings jitters are likely affecting market action as well. Alcoa (AA) unofficially kicks off the reporting season with a report due out Wednesday, after the closing bell. Analysts currently expect Corporate America will post a profit decline of 35 percent for the second quarter.
AA is one of seven Dow stocks moving higher during the first 90 minutes of trading. 23 are lower and the industrial average is down 75 points.
Bonds are unchanged with little to guide trading and ahead of an auction of $35 billion in 3-years. Results expected around 13:00 eastern time. The benchmark ten-year is flattish and its yield is pinned at 3.5 percent.
In the options market, volume and volatility are picking up a bit. The CBOE Volatility Index (.VIX) is up .5 to 29.5. Total options volume is running about 120 percent of normal, with 1.87 million calls and 1.71 million puts traded, a ratio of .91 (compared to a 22-day average of .77).
Category: Market Update
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About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.
