Dow Jones Industrial Average Retreats as Rate-Hike Expectations Rise

The Dow Jones Industrial Average (DJIA) has once again struggled for direction in early trading, but was last seen in the red. While a much bigger-than-expected jump in October nonfarm payrolls points to a strengthening economy, it also increases the chances for a December rate hike -- which would mark the Fed's first in years. Echoing that, notorious dove and Chicago Fed President Charles Evans said the latest jobs data was "very good," and vowed to keep an open mind at next month's highly anticipated central bank meeting. Against this backdrop, most blue chips are lower, but a post-payrolls rally in financial stocks and a post-earnings surge in Walt Disney Co (NYSE:DIS) are giving the bears a run for their money.

Outside of the Dow, gold turned lower after the jobs report, due to a strong dollar and easing "safe haven" demand. Crude oil also dipped, and energy traders are watching Capitol Hill, where President Obama is set to reject a proposed Keystone XL pipeline. 

Continue reading for more on today's market -- and don't miss:

 

• The one simple answer to all your CBOE Volatility Index (VIX) questions, courtesy of Schaeffer's contributor Adam Warner.
• Why it's a better-than-usual day to be Oprah Winfrey.
• Plus ... Checking in on the VIX, the SPDR S&P 500 ETF Trust (SPY), and other noteworthy stats at midday.

Among the stocks with notable option activity is brand management issue Iconix Brand Group Inc (NASDAQ:ICON), which is down 54.5% at $7.39 -- and just off a seven-year low of $6.77 -- after the company cut its full-year forecast. The firm also said it will have to restate financial results from the past seven quarters, triggering a downgrade to "hold" from "buy" at Brean Capital, and a $6 price-target cut to $10 at Wunderlich Securities. At last check, ICON puts are trading at 62 time the normal intraday pace, with buy-to-open action spotted at the out-of-the-money December 5 strike.

One of the Nasdaq's top performers is biotech ZS Pharma Inc (NASDAQ:ZSPH), which is up nearly 41% at $89.19 -- and just off an all-time best of $89.40, notched earlier -- after AstraZeneca plc (ADR) (NYSE:AZN) agreed to buy the firm for $90 per share. 

Among the leading losers on the NYSE is retailer Men's Wearhouse Inc (NYSE:MW), which is reeling after a profit warning and subsequent round of bearish brokerage notes. MW was last seen 44.8% lower at $22.13, and earlier gapped to a five-year low of $21.44. The shares of MW are now down roughly 50% year-to-date.

The CBOE Volatility Index (VIX) is up 0.3 point, or 1.7%, at 15.31. The "fear gauge" is on pace to settle a third straight session between its 10- and 20-day moving averages.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.37, with puts outpacing calls. At last check, SPY was 1 point, or 0.5%, lower at $209.18.