The market opened higher Wednesday, but was unable to hold onto those overnight gains. The Dow fell the hardest, losing 0.76%. Fed minutes became the excuse for profit taking, as they revealed little support for QE3 in the last FOMC meeting. Improving US economic data and a strong market have rendered another bond buying program unnecessary for the time being. After a strong run, though, the market may have been ready for a pull-back even in the absence of a major catalyst.
The biggest story in the market today was undoubtedly Apple (AAPL). The world's most valuable company continued its dizzying climb in the morning, but the wheels came off in a big way in the afternoon. Traders and investors piling into the stock following a very strong Q4 2011, but when a stock starts to go parabolic, there is always the threat of a sudden and harsh pull-back. AAPL topped out at $526.29 just before Noon ET, and less than an hour later it had fallen 4% from those levels. After a brief bounce, the stock again broke through the lows. AAPL finished the day down 2.3%, but 5.5% off morning highs.
The S&P also saw its first close below the 10-day moving average in the last eight sessions. The index has been extremely resilient, generally rallying from even the most shallow of sell-offs. Although the close below is a small composure change, the S&P is still holding above the upper level floor. The rest of the week will be interesting, although op ex pinning could have an impact on the action.
*DISCLOSURES: Scott Redler is long SPY, QCOM, OIH. Short QQQ, DIA.
