[Excerpted from Bill Cara's Daily Report]
Stocks took a nose dive at the open and later side-tracked through the day as the usual Talking Heads made the rounds of Financial Entertainment TV. Beginning Tuesday, the focus is on 1Q2009 earnings season.
On Tuesday, the DJIA (-186.29 -2.34% to 7789.56), S&P (-19.93 -2.39% to 815.55), and NASDAQ (-45.10 -2.81% to 1561.61) pulled back, clearly ending what until Monday’s softness had been an historically brilliant four-week rally. The Toronto Composite (-191.42 -2.12% to 8824.75), and Venture Board (-10.69 -1.11% to 952.48) were also down on the session, as they were on Monday as well.
In international equity markets Wednesday, the closing prices showed large losses [except for India +1.97% to 10742.3]: Australia -2.22% to 3567.5; Hong Kong -3.04% to 14474.9; Shanghai China -3.76% to 2347.4; and Japan -2.69% to 8595.0.
At 8:15am ET, France (+0.07%); Germany (-0.38%); and UK (-0.66%) were soft as traders were seeking to avoid risk.
In NY Tuesday, the Basic Materials sector (XLB -3.4%) was worst hit, but many others were similar. The best was also a loser, Utilities (XLU -0.5%), while the defensive pairing of Healthcare (XLV) and Consumer Staples (XLP) were also down less than the rest.
In the Financial sector (XLF), REITs ($DJR -8.8%) were crushed. The only industry group of note that lifted on the day was Goldminers ($XAU +0.5%), mostly because $GOLD futures contracts lifted +$12.40/oz to close at 881.70, back into the 880 support level that some analysts yesterday morning opined would not hold.
At 8:20am ET today, spot (cash) market prices for gold, palladium, platinum and silver (compared to yesterday morning prices) were: 883.15 (876.62), 223 (221), 1170 (1151), and 12.26 (12.12), and appear to be firming.
Gold prices seem to be closely tracking the $USB at this point, which means traders are still looking at it as a haven from risk, which is an interesting phenomenon, observed in the past during periods of deflation.
Tuesday, US Treasury yields on the 30-, 10-, and 5-year all dropped a bit as the long bond ($USB) lifted +0.56% to 126.78. The T-Bill yield was 0.190.
In currency trading yesterday, the $USD lifted +0.62% to 85.21, and the Yen also lifted +0.54% to 99.53. The losers were the Euro (-1.07% to 132.66) and Pound (-0.22% to 147.25), while the Cdn Loonie was basically flat (+0.06% to 80.82).
Wednesday morning the Euro is down a bit to 132.76 US and the trade-weighted $USD up slightly to 85.655.
Crude Oil ($WTIC -$1.90/bbl) dropped again, closing yesterday at 49.15. The price in the May futures this morning was a tad weaker at 48.08.
The DJIA futures were 7726 (-36) at 8:20am ET.
