Friday, June 29, 2007

Rally Fizzles as Quarter Ends

The major indices were all up nicely in positive territory on Friday morning, but as has been the case more often than not this month, sellers moved in and squelched any momentum and sent shares into negative territory.

As I've been noting all along, this sideways-down action is probably more healthy than continued gains, as were witnessed in April and May. A little cooling off was expected and a slow, measured selling period is preferable to a dramatic, surprise downdraft.

Dow 13,408.62 -13.66; NASDAQ 2,603.23 -5.14; S&P 500 1,503.35 -2.36; NYSE Composite 9,873.02 +7.25

The main culprit for today's decline was, again, the nasty oil futures market, which saw fit to push prices for light crude over $70.00, up $1.11 to $70.68 at the close. Inspired by low inventories at specific locations - despite US crude inventories being at 9-year highs - is the first time since August, 2006 that oil has closed above $70/barrel.

The high price of oil and it's derivative, gas, is disconcerting to US motorists, who, it's generally assumed, are not sophisticated enough to understand the vagaries of the oil supply-demand scenario. Likewise, Wall Street frowns upon the continuing hikes in crude and gas and their displeasure shows up on days like today.

Declining issues held a slim advantage of just about 200 stocks over advancers, while new highs held sway over new lows, 284-144.

Gold and silver barely budged, with gold closing at $650.90. Silver ended the week at $12.47.

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