Traders take profits to start the week following four consecutive winning sessions. The Dow (DJI) lost 107.24 points to close the session at 10,340.69. The S&P 500 (SPX) declined 12.67 points to 1,091.84 with the Nasdaq (COMP) giving up 24.86 points, or 1.11 percent, to 2,208.89. Volume was light on the session with the NYSE trading 830.8 million shares and the Naz turning over 1.70 billion shares. Market breadth was negative by an 8-to-22 and 6-to-21 margin on the Big Board and Naz respectively.

There was a time when financial stocks were considered stable investments, thanks to solid dividends and lack of volatility. Times have changed with financial shares showing a lot of volatility thanks to uncertainty in the sector across the globe. A report in the Wall Street Journal raised concerns about the stress tests that were performed on European banks. WSJ stated that the tests weren’t as comprehensive as they should have been, leading to many banks holding risky portfolios. This news took a toll on financials Tuesday with the Financial Select Sector HOLDR (XLF) down 2.30 percent to $14.19. The largest decliner on the Dow was American Express (AXP), which fell 4.09 percent to $40.09. 

In the tech sector, Oracle (ORCL) shares rallied 5.87 percent to a price of $24.27. The stock benefited from news ORCL had hired the former CEO of Hewlett-Packard (HPQ), Mark Hurd, as president. HP in turn is suing Mr. Hurd for revealing company trade secrets. HPQ shares decline 1.04 percent, closing below $40 at $39.92. Apple (AAPL) shares were down only slightly Tuesday to $257.81 after the company announced its new social music network Ping saw more than a million users during the two days following its launch. 

President Obama announced a $50 billion plan to rebuild U.S. infrastructure over the next six years. He also released plans for tax incentives for businesses that invest in plant and equipment through 2011. The hope is that these two initiatives will create jobs and bring down the unemployment rate, which sits at 9.6 percent. Of course, Republicans feel the move will do little to spur job creation in the near term. 

Economic news is light this week with the Fed Beige Book the most important report on tap. However, we should see some increases in volume as traders return from summer vacations. Nonetheless, it seems the major market indices are bound to stay in a range in the near term. 

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