China's currency move sparked a morning rally, but stocks slipped by the close
The big news today was China's decision to de-peg its currency from the U.S. dollar, which many traders interpreted as a vote of confidence in the global economy. The news propelled stocks higher right out of the gate, but bulls had trouble maintaining their positive momentum. A general lack of specifics from China regarding its new currency policy created uncertainty, and stocks surrendered to selling pressure by the close. "Today was a disappointment," said a Wall St dealer.
"But it's important to remember that we've seen a tremendous bounce during the past two weeks, so some profit-taking at this point isn't a shock."
The big news today was China's decision to de-peg its currency from the U.S. dollar, which many traders interpreted as a vote of confidence in the global economy. The news propelled stocks higher right out of the gate, but bulls had trouble maintaining their positive momentum. A general lack of specifics from China regarding its new currency policy created uncertainty, and stocks surrendered to selling pressure by the close. "Today was a disappointment," said a Wall St dealer."But it's important to remember that we've seen a tremendous bounce during the past two weeks, so some profit-taking at this point isn't a shock."
Indeed, despite today's eight-point loss, the Dow Jones Industrial Average (DJIA – 10,442.41), remains comfortably north of round-number support at the 10,400 level. However, the looming 10,600 region could act as short-term resistance; this area capped the Dow's intraday progress. Microsoft (MSFT) and Home Depot (HD) led the 17 declining blue chips into the red, while Alcoa (AA) paced the 13 advancers with a 5.5% rally.
The S&P 500 Index (SPX – 1,113.20) ended on a drop of 4.3 points, or 0.4%, but maintained a perch above its closely watched 200-day moving average.
Finally, the Nasdaq Composite (COMP – 2,289.09) suffered the steepest intraday plunge, ending on a deficit of 20.7 points, or 0.9%. The tech-rich COMP endured a harsh rejection from its session high of 2,340, but found support at the formerly resistant 2,280 level.
Crude futures climbed today, with black gold taking its cues from an initial surge higher in the equities market. However, a lack of specifics regarding China's planned currency maneuvers dampened early optimism, and crude futures surrendered some of their early gains as euphoria gave way to caution. Crude oil for July delivery settled on a slim gain of 64 cents, or 0.8%, at $77.82 per barrel.
Gold futures endured a volatile day, as the precious metal soared to a new record high of $1,266.50 per ounce before tumbling to a notable loss. A widespread buying boost pushed gold higher out of the gate, but the safe-haven commodity's new all-time peak eventually prompted a round of profit-taking. Gold for August delivery ended on a deficit of $17.60, or 1.4%, at $1,240.70 per ounce.
No comments:
Post a Comment