Friends
Despite a good weekly jobless claims number, and a decent Consumer Price Index number, stocks suffered the worst day we have seen in a while. The trigger seemed to be the selloff in the bond market (rates continuing to rise) as the yield on the 10 year note reached 2.80% at one point during the morning session. Remember, it was just in May that rates were at 1.60% on the ten year. That is a huge percentage move in bonds and the pace of the move has market participants edgy. Stocks suffered broad based losses as most everything seemed to be in the red today except the home builders (go figure) which had been crushed recently due to rising rates. Lousy earnings reports from Wal-Mart and Cisco contributed to the negative tone at the outset of trading.
By the close, the Dow Jones Industrial Average was down a whopping 225 points to finish the day at 15,112. The S&P 500 was down 24 points to close at 1661. Gold spiked $30 to trade at $1363 per ounce, while oil was up $.38 to trade at $107.23 per barrel WTI. Obviously, there was some technical damage done today (the Dow broke below its 50 day moving average, while the S&P held just above its 50 day) , but when adding everything up, the Dow and S&P are both down only about 3% from their recent highs.
What looked like a quiet late summer week has turned out to be anything but. The bears have put a little bit of fear into the bulls and some technical damage has been done. Tomorrow we’ll get housing starts numbers and consumer sentiment information. The bears have dominated the past two weeks. Can they continue to hold the upper hand tomorrow? We’ll let you know.
Have a nice evening everyone.
