Stocks pare losses but hold lower ahead of earnings, Fed meeting

Yahoo Finance's Jared Blikre breaks down surging levels of market volatility, gains in the U.S. dollar, and sector action for travel, pharmaceuticals, and retail.

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ADAM SHAPIRO: That hour can feel like a lifetime for some people, especially when you consider the last 15 minutes could see quite a bit of extended volatility. It's what we've been watching all day. As we take a look at the markets, we have been trending down. We're off the session lows, but we are still off about 1 and 1/2% on the Dow.

The S&P 500 at one point was off more than 3%, now off about 1 and 3/4%. NASDAQ is off about 1 and 1/2%. The words fear and capitulation. We're going to be hearing those a lot over the next couple of days. Let's go straight to Jared Blikre to find out where we stand and what we should pay attention to as common investments.

JARED BLIKRE: Well, we got the mid-- we're in the midst of a market sell-off here but well, well off of the lows. You take a look at the NASDAQ. That had been down almost 5% at these lows here. And you can see just climbing steadily trying to get back to the unchanged.

We got some nice candles that we'll take a look at in the second. Just want to show you the Dow, as you mentioned, Adam, had been down more than 1,000 points. Now, off less than 500. So a step in the right direction here. But you take a look at what the VIX is doing, VIX is pretty elevated. And this spike could be concerning.

34, 35 handle. You have to go back some period of time in order to see a spike like that. In fact, you go back about a year, and that's when we saw the last one. That was around GameStop, which, by the way, we're about to lap in a week or so. So really interesting time here for the markets.

Also want to check on the Russell 2000. That's down about a quarter of a % right now. And we can see-- actually, I don't know if you can see this, but this is a 20% decline. So it could fall into a bear market. The official 20% not so official to some people. But that could happen on the close as well.

And then you take a look at what some of the bond market is doing right now. 10-year T-note yield down 2 basis points. The five year down a little bit, as well, down 4 basis points now, kind of a little bit of a relief from that big surge that we saw a couple of weeks, the first few weeks of the year.

And then we've got to take a look at the US dollar index because on a longer term basis-- I'm going to put a five-year chart here. Actually let me bring this back down to a one. We did have this consolidation area that we had over first few weeks. And actually the first few weeks of December, we broke down-- false breakdown. Now, we're back up inside the range.

Surging dollar not good for a lot of risk markets, but we will keep an eye on that. And, of course, a lot of it has to do with what the Fed and the FOMC are going to do Wednesday. I've been saying all day I think we're at peak hawkishness in the Fed right now. And if the Fed is looking at losses of 10%, 15%, 20% in some of these indices going into that meeting, I have to think there's going to be a little bit of a walk back. But I don't know if you can bet the farm on it.

NASDAQ 100 is looking ugly, but it looked a lot uglier on the open. Tesla is down 5 and 1/2%. Alphabet and Apple down more than 2%. Apple's reporting earnings this week, this Thursday. And then we got some of these other guys into the next week-- Amazon, Microsoft, and Facebook, I believe.

Looking inside the travel sector, we've seen cruise ships and the cruise lines under a bit of pressure today. These guys are also off of their lows. Let me see if I can get a two-day view on Carnival Cruise line still in the lower half-- excuse me-- of this range. And you take a look at what's happened year to date, a lot of these stocks just falling out of bed very recently giving up all of its gains that it had early on in the year and now 4% in the red.

I do want to show one of the heaviest hit sectors this year. XLV, the health care sector ETF or the S&P 500 now down, I believe, eight or nine days in a row. It'll be one of those on the close. And a lot of losses there. Johnson & Johnson, that stock is down 10 days in a row at the close assuming it doesn't recover those 3 and 1/2% losses there.

So a lot of these stocks are looking ugly. But there's one sector that's showing a little bit of life here. And that would be the retail sector. A lot of this has to do with the M&A news about Kohl's that we got earlier. Just going to show Kohl's pretty quickly here on a longer-term basis. It's up 32% today.

Let me put a three-year chart because it has been going sideways for some time. And it's right back up to the upper end of its range. So not being able to punch through that right now. Not surprising, but a lot of analysts calling for maybe a $75 takeout price instead of the 60, 65 that have been floated over the weekend.

In sympathy, we're seeing Macy's up 15%. And a lot of these other guys just going to kind of on the-- I would say there's one pocket. If there's one pocket today, that's taking some money in. I think it's getting the bulk of it. So we are seeing some signs of life in the retail sector. Of course, we're going to be tracking this, as well, and just want to round out the discussion with Bitcoin finally showing some green over the prior 24 hours.

And look at this number, 36,115. Well, we did hit 33,000. And it's funny-- keep seeing the Dow in Bitcoin. Those prices overlap. It doesn't mean anything, but it's just interesting to watch some time. Bitcoin having kind of a rough go on it testing the lower end of a let's say the mid-30,000 area. But really it's a 28,000 to 38,000-- 28,000 to 30,000. That is that longer-term support. And you can see that on the longer-term chart that we have right here. Guys.

EMILY MCCORMICK: Jared Blikre, thank you so much for that comprehensive look at today's trading.