Markets Get Last Minute Push from Banks

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 |  Includes: AET, BBY, BC, DELL, DIA, DIS, EA, GLD, IBN, MIICF, OIL, PDA, QQQ, RY, SPY, UDN, UUP, VIP, WBA, XLF, XLI, XLV, XLY
by: Bill Cara

Thanks to a final hour push by the Banks ($BKX +1.3%), the US equity market indexes charged higher into positive territory after trading lower during the entire session, closing the day a tad lower.

At the close, the DJIA (8,764.49 +1.36 +0.02%), S&P 500 (939.14 -0.95 -0.10%) and NASDAQ Composite (1,842.40 -7.02 -0.38%) were about flat.

The Toronto Composite (10,549.12 -20.17 -0.19%) and the Toronto Venture Board (1,131.82 -6.17 -0.54%) were uninspired as Crude Oil and Gold had very little movement on the day.

Earlier Tuesday, equity prices were modestly positive in Austral-Asian markets except for Hong Kong (18,058.5 -194.9 -1.07%) and Aussie All Ordinaries (3,933.6 -35.40 -0.89%). Japan’s Nikkei 225 (9,768.0 99.1 +1.02%), Shanghai (2,787.9 +19.55 +0.71%), and India’s BSE 30 (15,127.0 +461.1 +3.14%) did make gains, particularly in India.

In the past few hours, the European equity bourses are not so positive. The French CAC (3,291.9 7:06AM ET +2.2 +0.07%), German DAX (4,992 6:52AM ET -12.7 -0.25%) and UK FTSE 100 (4,394.3 6:51AM ET -10.9 -0.25%) are mixed on the day.

In US trading Monday, the Healthcare sector (XLV -1.1%) was an anchor as Congress debated over a revamped healthcare system. Employment was also a focus after President Obama promised to create over 600,000 jobs this summer with the help of the government spending and bail-out programs. Added liquidity could serve to relieve some of the economic pain that comes with a national unemployment rate of +9.4% and which is expected to continue worsening.

The sectors that performed best, other than Financials (XLF +0.7%) were Consumer Discretionary (XLY +0.9%), helped by the Retailers ($RLX +0.6%), and the Industrials (XLI +0.3%).

There were 32 Cara 100 company stocks that lifted and 66 that fell back. The leaders on the upside were: Best Buy, Perdigao, Dell (although I thought this was removed), Disney, Walgreen, and Royal Bank of Canada (BBY +3.21%, PDA +1.98%, DELL +1.66%, DIS +1.52%, WAG +1.52%, RY +1.48%). On the downside, the leading the 66 losers were: Vimpel-Communications, Brunswick Corp, Aetna, ICICI Bank, MICC Communications, and Electronic Arts (VIP -6.95%, BC -6.72%, AET -5.16%, IBN -4.02%, MICC -3.94%, ERTS -3.61%).

The $USD was mostly flat on the day (80.75 +0.03 +0.04%), while the action was between the Euro (138.97 -0.73 -0.52%) taking the hit and the Yen (101.52 +0.32 +0.32%), Pound (160.53 +0.73 +0.46%) and Cdn Dollar (89.60 +0.28 +0.31%) making gains.

In a mixed US bond market, the US long Bond rebounded somewhat ($USB 114.88 +0.20 +0.18%) as the yield fell (4.635 -0.21 -0.45%). The yields for 10-year (3.889 +0.27 +0.70%), and 5-year (2.929 +0.76 +2.66%) lifted as those bond prices fell. Treasury bill yields were largely unchanged (0.170 -0.10 -5.56%), although the percentage move was large. Traders are considering one of two scenarios for higher yields: (i) economic recession possibly coming to an end sooner than later, and (ii) higher risks in the market requiring a higher yield.

Monday, $GOLD was quiet (951.80 -2.90 -0.30%). This morning, it was quiet until 7am. At that point, the spot (cash) market prices for precious metals were as follows: Gold (949.52 +1.82 +0.19% 06:58am ET); Palladium (249 +4 +1.63% 06:58am ET); Platinum (1237 +13 +1.06% 06:52am ET); and Silver (14.93 +0.15 +1.01% 06:58am ET). But by 8:26am ET, Gold (958.42 +10.72 +1.13% 08:26am ET); Palladium (250.5 +5.5 +2.24% 08:25am ET); Platinum (1246.0 +22.0 +1.80% 08:22am ET); and Silver (15.27 +0.49 +3.32% 08:26am ET).

Dollar futures were dropping quickly and the Euro lifting higher in the past 90 minutes (1.3955 +0.0064 +0.46% 08:16 am ET).

Crude Oil futures were also lifting quickly in the past 90 minutes (69.225 +1.135 +1.65% 08:16), and looking to challenge 70 soon.

US equity futures for the DJIA were priced at 8737 (-22 -0.25%) at 06:44am ET but then shot higher (8770 +11 +0.13% 08:16am ET).