The Dow Jones Industrial Average (DJIA) spent a fourth straight session in the red today, after the Congressional Budget Office (CBO) fanned the debt-ceiling flames. Specifically, the CBO said budget proposals on both sides of the political aisle failed to live up to their cost-cutting projections, sending House Speaker John Boehner and Senate Majority Leader Harry Reid scrambling for the proverbial White-Out. Meanwhile, the latest round of domestic data only added insult to injury, after the Commerce Department reported a surprise drop in durable goods. The combination of a looming debt-ceiling deadline and an uninspiring economic report set the stage for another broad-market selling spree, and bolstered the CBOE Market Volatility Index (VIX - 22.98) -- or Wall Street's "fear barometer" -- to its best finish in four months.
The Dow Jones Industrial Average (DJIA – 12,302.55) once again settled near an intraday low, surrendering 198.8 points, or 1.6%, to mark its worst session since June 1. However, the index found an eleventh-hour foothold atop the 12,300 level -- home to its 40-day moving average. Among the Dow's components, a solid earnings showing helped Boeing (BA) to a 0.7% gain, while AT&T (T) eked out a fractional gain -- making it the only other blue chip to buck the trend. On the flip side, Caterpillar (CAT) and Cisco Systems (CSCO) paced the 28 declining equities, each swallowing a 3.7% loss by the close.
Meanwhile, the S&P 500 Index (SPX – 1,304.89) also steepened its losses as the session progressed, giving up 27.1 points, or 2%, by the time the dust settled. As such, the broad-market barometer ended south of its 10-day and 20-day moving averages for just the second time since late June. Finally, the Nasdaq Composite (COMP – 2,764.79) fared the worst of the three, backpedaling 75.2 points, or 2.7%, as poor earnings from Juniper Networks (JNPR) exacerbated the broad-market headwinds. As a result, the tech-rich COMP is now trading beneath its own 10-day and 20-day trendlines for the first time since June 24, and south of the 2,800 level for the first time since July 18.
Turning to equities in focus, sector peers Aetna (AET) and WellPoint (WLP) posted differing second-quarter results ... Panera Bread (PNRA) failed to meet same-store sales expectations ... Call holders took profits in the wake of Cardiome Pharma's (CRME) recent rally ... Post-earnings call volume revved higher on Ford Motor (F) ... Amazon.com (AMZN) reached a new multi-year high after an impressive quarterly report ... Starbucks (SBUX) scored an upgrade ahead of its third-quarter earnings release ... and today's Quote of the Day comes from Representative James Lankford (R-OK). With the debt-ceiling clock ticking, conservatives who once opposed House Speaker John Boehner's budget plan suggested they could change their minds. Why? As Lankford clearly explains.
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