Today's market action was an eerie reversal of Wednesday's pattern. Yesterday, a negative housing report sparked early losses -- which were then erased by an afternoon wave of bargain-hunting. Unfortunately, traders seem to have misplaced their rose-colored glasses overnight: Stocks started off on strong footing today after a surprisingly large drop in weekly jobless claims, but lingering economic anxieties pressured the major market indexes into negative territory by the time midday rolled around. In particular, a bit of bad news from the Kansas City Fed seems to have sparked the sudden shift in sentiment; the region's manufacturing index dwindled to zero in August, down substantially from July's reading of 14. As a result, the major market indexes reversed course from respectable gains to modest daily losses -- and the Dow Jones Industrial Average (DJIA) settled south of the key 10,000 mark.
“This market continues to be very fragile. All economic data coming out of Washington has put a damper on this market,” said a senior Wall Street analyst.
The Dow Jones Industrial Average (DJIA – 9,985.81) finished on a deficit of 74.25 points, or 0.7%, as all but two of its 30 components closed lower. Boeing and Home Depot were the only advancing blue chips, while Cisco Systems paced the 28 declining Dow members. The Dow finished the day south of 10,000 for the first time since July 6, and has already racked up a weekly loss of 2.2%.
The S&P 500 Index (SPX – 1,047.22) followed suit by shedding 8.1 points, or 0.8%, and breaching support at 1,050 for the first time since July 6. Likewise, the Nasdaq Composite (COMP – 2,118.69) gave up 22.9 points, or 1.1% -- but the tech-heavy COMP remained within its recent trading range between 2,100 and 2,150.
Crude futures inched slightly higher, notching a second consecutive daily win despite turmoil in the equities market. Black gold has lured buyers since dipping as low as the $70 region earlier this week, and the trend toward bargain-hunting continued today -- even after stocks gave back their morning advance following the Kansas City Fed report. Crude oil for October delivery ended on a gain of 84 cents, or 1.2%, at $73.36 per barrel.
Conversely, gold futures staged a modest retreat after attaining an eight-week peak on Wednesday. The day's mixed bag of economic data didn't offer traders any cues, and so commodity players erred on the side of profit taking. As a result, gold for December delivery wrapped up the day on a drop of $3.60, or 0.3%, at $1,237.70 per ounce. HAPPY TRADING
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