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Saturday, February 26, 2011

WALL STREET >>> Dow Rebound In Worst Week Of 2011

Bulls Grab 1st Win In a Week
Crude Oil Distress Dissipated
Stocks chipped away at their weekly deficits today, as crude-related distress dissipated on news that Saudi Arabia will step up to the proverbial plate. More specifically, the oil-rich nation raised production by about 8%, an industry source told Reuters, in an attempt to curb supply issues stemming from threats of a civil war in Libya. On the home front, meanwhile, the Street celebrated news that consumer confidence soared to a three-year peak in February, as well as Boeing's (BA) freshly inked $30 billion tanker deal with the U.S. Air Force. As the bullish stars seemingly aligned, the government's relatively lackluster revision to fourth-quarter gross domestic product (GDP) remained in the background of investors' minds, with the Dow Jones Industrial Average ending higher for the first time in a week.

The Dow Jones Industrial Average (DJIA – 12,130.45) added nearly 62 points, or 0.5%, today, but failed to reclaim support at its 10-day and 20-day moving averages. Only 10 of the Dow's 30 components bucked the trend, with Microsoft (MSFT) leading the bearish minority, while Intel Corp. (INTC) and Boeing paced the 20 advancing equities with gains of more than 2% apiece. For the week, the Dow gave up 2.1%, marking its first week-over-week loss since the week ended Jan. 28.

In the same vein, the S&P 500 Index (SPX – 1,319.88) tacked on 13.8 points, or 1.1%, but ran into a wall in the 1,320 neighborhood. Finally, the Nasdaq Composite (COMP – 2,781.05) once again fared the best of the three, advancing 43.2 points, or 1.6%. Both the SPX and COMP ended just barely north of their 20-day moving averages, but continue to stare up at their 10-day trendlines. For the week, the SPX gave up 1.7%, while the COMP shed 1.9%.

Crude futures finished modestly higher today, but remained south of the psychologically significant $100-per-barrel marker. Lifting black gold were lingering concerns about violent protests in Libya, which many still fear could spread throughout the oil-saturated Middle East.  However, limiting oil's rise was news that Saudi Arabia boosted its crude output to calm supply-related anxiety. Against this backdrop, April-dated crude futures added 60 cents, or 0.6%, to end at $97.88 per barrel – the loftiest weekly settlement since September 2008. For the week, the front-month contract tacked on a whopping 9.1%.

Gold futures took a respite from their rally to seven-week highs today, as easing concerns about oil supplies dampened the metal's appeal as an inflationary hedge. Furthermore, a rebound in the equities market prompted many traders to try their hand at riskier assets, as opposed to "safe havens" like gold. By the close, gold for April delivery snapped its seven-session winning streak by giving back $6.50, or 0.5%, to settle at $1,409.30 an ounce. For the week, the precious metal tacked on 1.5%.

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