Thursday, December 10, 2009

Higher Day on Dollar Indifference

Stocks moved higher again on Thursday in tepid action, closing well off the highs made in the first fifteen minutes of trading. Once the Dow moved higher by 100 points at the open on the back of a rather poor unemployment report - up to 474,000 new claimants as opposed to 454,000 the week before - stocks quickly moved lower to test the gap-up open and then proceeded to trade in a 40 point range for the remainder of the session. With the trading volume low and lack of participation seen as a major detriment, stocks traded without conviction, just as they did on Wednesday.

Dow 10,405.83, +68.78 (0.67%)
NASDAQ 2,190.86, +7.13 (0.33%)
S&P 500 1,102.35, +6.40 (0.58%)
NYSE Composite 7,104.50, +36.88 (0.52%)

Advancing issues beat decliners, though by a slim margin again, 3327-3128, with most of the winners residing on the NYSE. There were 327 new highs, to just 55 new lows, with the margin expanding for the first time in five days. Volume was as dull as it has been all week long.

NYSE Volume 4,592,418,500
NASDAQ Volume 1,950,587,875

Oil took another small hit, down 13 cents, to $70.54, the lowest level since mid-October and the sixth straight session in which the price has declined. The slippery stuff traded briefly below $70 a couple of times during the session, though, like stocks, there was little to no influence from the dollar trade, which also traded in a narrow range of just 0.20, finally hitting the key 76.00 level just as the stock markets were closing. Gold finished highre for a change, breaking a string of losses with a gain of $5.50, to $1,126.40. Silver did likewise, up a peevish 3 cents, to $17.21.

The lack of interest in the dollar movement kept every trading vehicle in tight ranges. It's a very dull market, facing end-of-year issues, low participation rates and a slew of unresolved conditions, such as the US employment condition, debt issues from Dubai, to Greece, to Spain, increasing residential foreclosures and a sluggish worldwide recovery.

Tomorrow's end-of-week trading will be aided by guidance before the bell from November retail sales, which are expected to be modestly higher, though those expectations may still be out of line with reality. Even more important will be December retail sales, though those won't be fully known until well after the fact.

Therefore, investors are sailing a ship without much of a rudder and a broken compass. Stocks have been in a holding pattren since the end of earnings season, three weeks ago. Hopes for a "Santa Claus Rally" are fading about as quickly as Tiger Woods marriage vows.

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