Dow breaks 10,000 as traders sell financials on global financial concerns. The Dow (DJI) fell 103.84 points, or 1.04 percent, closing the session at 9,908.39. The S&P 500 (SPX) lost 9.45 points, or 0.89 percent, to 1,056.74. The Nasdaq (COMP) gave up 15.07 points, or 0.70 percent, to 2,126.05. Volume was light on the session with the NYSE trading 1.09 billion shares and the Naz turning over 2.05 billion shares. Market breadth was negative by a 11-to-20 and 9-to-17 margin on the Big Board and Naz respectively.

European finance ministers tried to ease concerns about the debt issues in Spain, Portugal and Greece, but traders don’t seem to be convinced. These ministers told Group of Seven leaders that the situation is under control, but traders still feel these issues could spread. This news combined with reports in The Wall Street Journal that Fed Chairman Bernanke is laying the groundwork for credit tightening later in the year. The dollar did weaken against the euro, sending oil prices a bit higher.

The Dow is now down 7.6 percent from its Jan. 19 high with traders now looking for a correction. This is defined as a 10 percent decline, which would put support near 9,650. Both the CBOE Market Volatility Index (VIX) and Nasdaq Volatility Index (VXN) are trading above their 200-day moving averages, which could mean some continued volatility and declines in the sessions to come.

Financial stocks saw the largest declines Monday with the Financial Select Sector SPDRs (XLF) down 2.01 percent to $13.66.  Bank of America (BAC) shares fell 3.47 percent to $14.48 with Travelers (TRV) down 2.41 percent to $49.07. These two stocks were the worst performers on the Dow. One Dow component that did see a bullish move was Home Depot (HD).

HD shares gained 2.11 percent to $28.57 after Morgan Stanley raised its rating on the stock to “Overweight” while adding the stock to its “Best Ideas List.” Morgan feels that Home Depot will benefit from a recovery in the housing sector. HD shares have a 52-week range from $17.409 to $29.44.

Earnings reports from CVS Caremark (CVS) and Hasbro (HAS) pushed these stocks higher on the session. CVS shares gained 5.28 percent after the reporting strong same store sales data that bested competitor Walgreen (WAG). HAS shares saw their largest one day gain in 14 years. The toy maker expects growth in 2010 and this helped push the stock to a new 52-week high, closing at $34.71.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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