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T3's Take 3: Crude Oil Has a Wild Ride Once Again


Today's financial recap and tomorrow's financial outlook.

Oil, Everyone's Best Friend

It was another wild ride for crude oil today.

Oil rumbled slightly higher ahead of the inventory numbers. There was a significant inventory draw, which sent oil shooting up to $38.99.

However, sellers came right in and pulled oil down into the red, frustrating traders.

Unusually though, oil stocks actually rose today, with the Energy Select SPDR (XLE) powering an impressive 1.3%.

Energy Master Limited Partnership Kinder Morgan (KMI) was a big story once again today as it announced after the close yesterday that it reduced its quarterly dividend to $0.125 per quarter from $0.51, a drop of 74%

However, Kinder Morgan shares actually closed 6.9% higher at $16.81 after hitting a $14.40 pre-market low.

Since a rumor of a dividend cut was making the rounds earlier in the week, it appears traders already priced in the bad news.

Market Roundup

Markets moved sharply lower again today as traders remain risk-averse ahead of next week's Fed rate decision amid the aforementioned sky-high oil volatility.

The S&P 500 fell 0.8% to 2047.62, while the NASDAQ Composite took a major beating with a 1.5% drop.

A major contributor to the NASDAQ's weakness was a slump in biotechnology shares.

The Nasdaq Biotechnology Index ETF (IBB), once the market leader, fell 1.6%.

Big-cap tech highflyers like Netflix (NFLX) and (AMZN) also took heat and suffered drops.

Traders still appear to be on edge, as the VIX rose sharpy and hit 20.13 intraday, the highest reading since November 16.

Additionally, the VIX curve inverted, indicating that traders expect significant near-term volatility.

Yahoo! Announces Strategic Moves

On Tuesday after the close, internet/media giant Yahoo! (YHOO) said it would not pursue a spinoff of its stake in Alibaba (BABA). Yahoo! does not believe such a transaction would attain tax-free status from the IRS.

Instead, Yahoo! is focused on spinning off its core internet business, though such a transaction could take a year or more.

And while CEO Marissa Mayer was rumored to be on the chopping block, Yahoo!'s board expressed total confidence in her ability to lead the company forward.

Traders were not happy with Yahoo!'s plan due to the time it will take to implement, and the stock dropped 1.3% following a short initial rally.

Thursday's Financial Outlook

The US economic calendar today will see Jobless Claims, Import and Export Prices, and the Treasury Budget will be released.

Overseas, the Swiss National Bank will announce their Rate Statement and the Bank of England will announce their Official Bank Rate which will directly impact the Great British Pound.

On the earnings front, Ciena (CIEN) will report before the open. Adobe Systems (ADBE) and Peregrine Pharma (PPHM) will report after the close.

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