Market Wrap: Indexes Slide as Airlines, Energy Stocks Drop

Getty Images By ALEX VEIGA

The stock market couldn't shake off a case of the jitters from last week and closed sharply lower again on Monday.

Airlines, energy and materials stocks were among the biggest decliners. The market is coming off its biggest weekly decline in more than two years.

Many investors remain concerned that economic growth in Europe and Asia could be slowing. A meeting of Eurozone finance ministers in Luxembourg didn't appear t! o ease those concerns.

The VIX, a measure of volatility that is commonly called Wall Street's "fear index," climbed 12.7 percent to 23.95, its highest level since June 2012.

"There is a sense that ... the U.S. maybe can't go it alone, that if global growth continues to weaken, the U.S. is not going to be able to sustained the kind of momentum we've been gaining since the first quarter," said Quincy Krosby, market strategist at Prudential Financial. "That's the worry."

A late slide in the last half-hour of trading came after an otherwise calm day of trading. Index futures had pointed to a higher open in premarket trading early Monday, then the market opened lower and wavered for much of the day between small gains and losses.

The late wave selling was likely triggered by automated trading programs that started selling stocks when it became clear that the S&P 500 would close below an important technical level, said Randy Frederick, managing director of! trading and derivatives at Schwab Center for Financial Resear! ch.

Many traders follow these levels to give them an indication about the near-term direction of the market.

In this case, the S&P 500 closed below 1,905, the 200-day moving average price for the index. The index had traded above the average since November, 2012, gaining 36 percent.

"We've broken down to a point where we haven't been for a long, long time," Frederick said.

Frederick still thinks the stock market will avoid a correction, that's Wall Street talk for a drop of 10 percent or more, but is expecting the recent volatility to continue for a few more weeks yet.

All told, the Dow Jones industrial average (^DJI) lost 223.03, or 1.4 percent, to 16,321.07. The Standard & Poor's 500 index (^GPSC) shed 31.39, or 1.7 percent, to 1,874.74. The Nasdaq composite (^IXIC) slid 62.58 points, or 1.5 percent, to 4,213.66.

All of the 10 sectors in the S&P 500 fell, led by energy with a decline of 2.9 percent. Utilities, a safe-play sector, fell t! he least, just 0.1 percent.

Airline stocks also fell sharply.

That sector has received a drubbing from investors recently as worries mount that the outbreak of the Ebola virus will curb travel spending. Concerns about a slowing global economy have also hurt the stocks. American Airlines Group (AAL) fell $2.20, or 7.1 percent, to $28.58 and Delta Air Lines (DAL) fell $2.01, or 6.1 percent, to $30.90. American has fallen 24 percent in the last month, Delta 22.2 percent.

Investors were looking ahead to earnings news from a number of big companies later this week including General Electric (GE), Intel (INTC) and Bank of America (BAC).

The price of U.S. oil slipped slightly and the global oil price fell sharply on expectations that OPEC countries will not cut output in response to lower global demand. Benchmark U.S. crude fell 8 cents to close at $85.74 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by m! any U.S. refineries, fell $1.32 to close at $88.89 on the ICE Futures e! xchange in London.

In other energy futures trading on the NYMEX, wholesale gasoline fell 0.3 cent to close at $2.255 a gallon, heating oil fell 0.3 cent to close at $2.557 a gallon and natural gas rose 5.7 cents to close at $3.916 per 1,000 cubic feet

Gold rose $8.30 to $1,230 an ounce, silver rose four cents to $17.35 an ounce and copper was flat at $3.04 a pound.

Bond trading was closed for Columbus Day.

What to Watch Tuesday:
These major companies are scheduled to release quarterly financial statements:

• Citigroup (C)
• CSX (CSX)
• Domino's Pizza (DPZ)
• Intel (INTC)
• J.B. Hunt Transport Services (JBHT)
• Johnson & Johnson (JNJ)
• JPMorgan Chase (JPM)
• Linear Technology (LLTC)
• Wells Fargo (WFC)

• The days of the dot.com bubble are long past, and with them, companies whose "business" model involved giving away free stuff in hopes of attracting "eyeballs" to their websites. (Remember when Priceline.com would allow you to buy groceries and gasoline for less-than-cost -- for no particular reason?) But the business practice of giving away sample products in hopes you'll try, then buy, still has some merit. Kiplinger's highlights two websites that compile lists of goodies you can get free:

  • HeyItsFree.net as of this writing features free samples of Nesquik chocolate milk, Arm & Hammer toothpaste and Dove shampoo among its front-page offers.
  • MrFreeStuff.com currently tells you how to pick up a free cookie at McAlister's Deli and a free photo magnet from Shutterfly.
  1. A Grab Bag of Free Goodies
• Restaurants are another great place to pick up freebies -- although you may need to keep a close eye on your calendar. Surveying just a few of the offerings, Kiplinger's notes that on National Pancake Day (Feb. 28 next year), DineEquity's (DIN) International House of Pancakes serves up a stack of free pancakes. Only July 11, 7-Eleven hands out free Slurpees. And to help take the bite out of tax day, Cinnabon offers up two free Cinnabon Bites.
  2. Free eats
• After scarfing down a Cinnabon (much less two), dessert is probably the last thing on your mind. But for incurable sweet-tooths, Kiplinger's points out that Dairy Queen has a loyalty club that entitles members to buy-one, get-one-free Blizzards. And one day a year, Ben & Jerry's gives away free cones of ice cream during Free Cone Day. (Kiplinger's notes that this "usually" happens in April.)
  3. And free dessert
• Pep Boys (PBY) will rotate your tires, inspect your brakes and track down what makes that annoying "check engine" light keep turning on -- all for free. Now, you may have to sign up for a Pep Boys' loyalty card to take advantage of this. Pep Boys also use the free services as a way to lure you into its stores, and these "free inspections" are a great way to encourage you to pay Pep Boys to repair these problems. Like the saying goes, there's no such thing as a free lunch. But jumping through a few hoops may not be too high a price to pay for "free."
  4. Eat your heart out, Jiffy Lube
• Free health care, anyone? Kiplinger's points out that under the Affordable Care Act, "most health plans now must provide a variety of preventive-care benefits free." These include "screenings for high blood pressure, mammograms for women older than 40, and routine vaccinations for children, as well as a long list of other tests and services." Granted, taxpayers are paying for all of this -- so in a sense it's not actually "free." But if you're a taxpayer, you've already paid for it, so you might as well get what you've paid for.
  5. A tuneup for your body
• There's hardly a parent in America these days who would argue that college doesn't cost too much. But sometimes it's free. Kiplinger's notes that Berea College, in Berea, Kentucky, provides all students a four-year tuition scholarship that amounts to nearly $100,000 in value. Berea's website promises this: "Every Berea student is awarded our Tuition Promise Scholarship." Admission to Berea is "highly competitive," of course. But if you get in, "the actual cost to students and their families is $0."
  6. A free college degree, anyone?
• 7. Lessons in life
• More from Rich Smith

Source : http://www.dailyfinance.com/2014/10/13/market-wrap-indexes-slide-as-airlines-energy-stocks-drop/