Stocks End Mixed on QE2 Concerns, VIX Holds Over 20

Even though the Dow ended down, selling pressure has been very minimal and the pullback today was more due to a lack of buyers than anything else.
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Stocks ended the session mixed on the back of a Wall Street Journal report that the Fed is expected to reveal plans to purchase U.S. Treasury bonds worth a few hundred billion dollars over several months, but investors had been anticipating a more significant attempt to boost economic growth with asset purchases. Even though the Dow ended down, selling pressure has been very minimal and the pullback today is more due to a lack of buyers than anything else.

The Dow Jones Industrial Average ended down 43.18 points, or 0.39%, to close at 11,126. The S&P 500 lost 3.19 points, or 0.27%, to close at 1182, and the Nasdaq was up 5.97 points, or 0.24%, to finish at 2503.

Commodities finished lower across the board as the U.S. dollar traded higher for the second day in a row. Crude took a leg lower after EIA crude oil inventories came in at a bigger build than expected, though the sell off was muted due to the gasoline draw coming in at a smaller build than anticipated.

The CBOE Volatility IndexI:VIX closed up $0.48, at $20.70. VIX put volume of 66,000 contracts compared to call volume of 146,000, with November 25 puts the most active strike on 20,800 contracts. VIX has resistance at its 50-day moving average of $22.42. Decreasing at-the-money option implied volatility suggests traders are pricing in less upcoming risk.

SPDR S&P 500 ETF (SPY) - Get Report. The SPYs closed down $0.38, at $118.38, with overall put volume of 1.02 million contracts trading as compared to call volume of 631,000. November put option implied volatility is at 19 and December is at 21 versus its 26-week average of 23. SPY traded through its near-term support at $118.50. Major support is at its 50-day moving average of $113.04.

The PowerShares QQQ Trust (QQQQ) closed up $0.16, at $52.19. Overall put volume of 194,000 contracts compared to call volume of 123,000, with November 52 puts active. November put option implied volatility is at 21 and December is at 23 versus its 26-week average.

The following economic data are expected to be released on Thursday: Jobless Claims at 8:30 a.m. EDT, EIA Natural Gas Report at 10:30 a.m. EDT. The highlight of the week will be the first look at Q3 GDP that is due to be published Friday morning. Consensus is forecasting growth of 2.1% for Q3, up from the Q2 reading of 1.7%.

The earnings calendar will be very heavy Thursday. The following notable companies are schedule to report Before the open: ATE, AVT, AZN, BASF, BAYRY, BBW, BDC, BEN, CAH, CL, CME, CMS, DAI, DASTY, DBD, DOW, DUK, EK, FO, FTE, G, GT, HOT, ITG, KBR, LEA, LPL, LLL, LVLT, LZ, MCO, MJN, MMM, MOT, NTDOY, PLD, PMI, POT, RDS, RTN, RVSN, STD, SNY, STRA, TEL, TEN, TSM, WM, XOM; After the close: ARBA, BMC, CERN, CSTR, EMN, ENH, EPIC, EXPE, FII, GNW, IM, IN, KLAC, LPS, MCRS, MET, MFE, MSFT, MXIM, NSR, NVTL, PDFS, QSFT, ROVI, SCSC, SWI, TSRA, VRSN, VSEA.

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