Another sluggish, low-volume day on Wall Street started on the downside, melted up during the midday hours and ended nearly flat - with the exception of the NASDAQ momentum stocks - as traders ignored a Euro sell-off that normally pounds stocks in the same direction and Italian 10-year bond yields tearing back above seven percent that ignited a 400-point decline just a week ago.
So, unless one has a crystal ball with special powers, predicting the direction of trading based on correlations has become a true guessing game once again.
The morning's economic data was strong, offsetting the effects of Italy's bond yield rise. PPI declined by 0.3% in October, a signal that inflation might be still controllable, though one month's data does not make a trend. Retail sales posted a solid 0.5% in October, a third straight increase.
Maybe more consoling than anything was the New York manufacturing index, which popped slightly into the positive, at 0.61, after a string of months in the red.
Also making morning headlines was word that Occupy Wall Street (OWS) protesters were removed from Zuccotti Park by New York City police in riot gear in the pre-dawn hours.
As the day progressed protesters awaited word on a ruling from state Supreme Court that would bar the city from enforcing evictions and the dismantling of tents. According to unconfirmed reports, after trading closed, the court decision said the protesters could return to the park, but could not bring in sleeping bags or erect tents.
The continuing climb of crude oil has some people concerned and speculators ebullient as the price of WTI crude oil approached the $100 mark. Gas prices have recently declined as oil sold below $80 a barrel in September, before bouncing back to current levels. With the holiday shopping season approaching, retailers are concerned that high gasoline prices will crimp travel and spending on gifts.
Being loosely tied to supply-demand mechanisms, oil prices seem more inclined to rise to unsustainable levels than reach equilibrium, despite lower demand.
Within all of this, trading volume has slumped to summertime levels for the second straight session. What's holding back traders could be a variety of issues, ranging from the continuing, unresolved issues in Europe to the nearly stalled negotiations by the congressional super-committee that is supposed to recommend policy changes in the form of spending reductions and/or tax increases by November 23. The six Democrats and six Republicans on the committee are deadlocked, with no resolution in sight.
Tomorrow will bring a fresh set of economic data, most importantly Industrial Production and Capacity Utilization, two readings that often indicate the strength or weakness in the manufacturing sector.
Dow 12,096.16, +17.18 (0.14%)
NASDAQ 2,686.20, +28.98 (1.09%)
S&P 500 1,257.81, +6.03 (0.48%)
NYSE Composite 7,509.05, +15.75 (0.21%)
NASDAQ Volume 1,667,635,375
NYSE Volume 3,500,557,250
Combined NYSE & NASDAQ Advance - Decline: 3667-1946
Combined NYSE & NASDAQ New highs - New lows: 96-100
WTI crude oil: 99.37, +1.23
Gold: 1,782.20, +3.80
Silver: 34.46, +0.43
Tuesday, November 15, 2011
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