16:25 ET
Market Rallies as Financials Bounce Back
Dow +117.54 at 13660.94, Nasdaq +30.00 at 2825.18, S&P +18.10 at 1520.27
- Credit concerns were set aside on Tuesday as the stock market rallied in the face of rising oil prices, which rose 3.3% to $97.10 per barrel at their high for the session.
Oil prices fell back some to end the trading session at $96.70. Their upward move was fueled by multiple factors, including anxiousness that the government's weekly inventory report on Wednesday will show another decline in crude stockpiles. A bombing in Yemen that shut down an oil pipeline, a forecast for inclement weather in the North Sea, and the Energy Information Administration boosting its full-year 2008 U.S. crude price forecast from $73.50 per barrel to $79.92 per barrel also played a part.
In turn, continued weakness in the dollar index, which slipped 0.5% to $76.04, served as another buying catalyst for commodity traders. The weakness in the greenback, which sparked inflation chatter, remained a healthy prop for gold prices, which hit a 27-year high at $827.20 per ounce. Gold futures for December delivery settled up 1.6% at $823.40.
With the jump in commodity prices, it was little surprise to see the energy (+2.7%) and materials (+2.5%) sectors score the largest percentage gains in Tuesday's trading. Airlines, meanwhile, were among the weakest performers as they were grounded by the spike in oil prices.
The most influential mover of the day was the financial sector (+1.7%) as it garnered a bargain hunting bid with Goldman Sachs (GS 223.16, +4.77) again denying rumors that it is going to announce a write-down. Citigroup (C 35.08, -0.82) remained a conspicuous laggard as participants continued to show little interest in the stock, which is down 37% year-to-date.
Conversely, there remained a good deal of interest in the large-cap technology issues with many of the usual suspects leading the buying brigade. Cisco (CSCO 34.08, +1.00) was a headliner in this respect as investors were feeling optimistic ahead of its earnings report on Wednesday. Other luminaries included Google (GOOG 741.79, +16.14), Apple (AAPL 191.79, +5.61), Intel (INTC 27.49, +0.65) and Oracle (ORCL 22.83, +0.76).
The latter stock was added to the Americas Conviction Buy List at Goldman Sachs. In turn, Goldman Sachs removed Microsoft (MSFT 36.41, -0.32) from the same list, a move that contributed to its relative weakness.
There weren't any economic reports today, yet the Treasury market got knocked back a bit by the stock market rally that saw the major indices close at their best levels of the session.
-----------------------------------------------------
12:05 ET
New Highs for Oil, Lows for Dollar
Dow +1.55 at 13544.29, Nasdaq -7.14 at 2787.32, S&P +1.73 at 1503.90 (12:25pm)
- The stock market opened in the green on a morning with a modest amount of market moving news. The major indices have since traded in a choppy manner, and have now given up all or the majority of their previous gains. Microsoft (MSFT 35.94, -0.80) is leading the Nasdaq lower after it was removed from Americas Conviction List at Goldman Sachs.
There were a number of positive earnings reports this morning but few from companies that will generate major headlines. Emerson (EMR 53.94, -2.44) and Valero Energy (71.89, +2.47) topped expectations. Sun Microsystems (JAVA 5.24, -0.47) topped profit expectations, but missed on revenue.
Commodities, on the other hand, are having a very strong day as the dollar continues to weaken. The dollar has hit an all-time low against the euro.
Crude oil hit an all-time high in electronic trading on speculation of a bullish Energy Information Administration (EIA) inventory report on Wednesday and reports of a storm in the North Sea disrupting drilling.
Oil then rallied past $97 a barrel following a Reuters report that stated that the EIA has raised its full-year 2008 U.S. crude price forecast to $79.92 a barrel from $73.50 a barrel. Additionally, the EIA stated that the OPEC production increase "may not be sufficient" to stop inventory declines. Separately, there are reports of an attack on a Yemeni oil pipeline. A barrel of crude for December delivery is currently up 3.0% to $96.80. The energy sector (+1.8%) is providing leadership as it follows crude oil prices higher.
Meanwhile, gold, up 2.1% to $825.80, has hit a 28-year high. The CRB Index, which tracks a broad range of commodities, is up 1.6%.
-----------------------------------------------
Oil Hits New All-Time High
Dow +32.42 at 13570.71, Nasdaq +3.56 at 2798.35, S&P +5.48 at 1507.23 (10:35 AM)
- Reuters reports that the government’s Energy Information Administration (EIA) has raised its full-year 2008 U.S. crude price forecast to $79.92 a barrel from $73.50 a barrel. Additionally, the EIA stated that the OPEC production increase "may not be sufficient" to stop inventory declines. Crude oil topped $96.70 a barrel following the report, but has eased slightly to $96.58.
Meanwhile, stocks are trading near their lowest levels of the session, but remain in positive territory.
As you can see above, I expected a double bottom and then a move up and since there were no news effecting the market this decline was very unexpected. Although, as I looked at the charts and thought about how I would've been trading had I been someone new to the trading game.. I realized that today would've been one of those days where the newbies make money.
Btw, no trades as it as a trending day and I couldn't pull the trigger... richards computer is doing a better job then me! x)
