YAHOO [BRIEFING.COM]: Stocks
shook off a listless start to extend their four-month highs, but they failed to
sustain gains in the face of resistance. Not even a pledge of support from the
FOMC and better-than-expected housing start and building permit data could prop
up the major averages.
Trade started on a rather dull
note as the major averages made a modest slip in the opening minutes. Losses
were generally contained as the S&P 500 was supported at the 1136 to 1138
zone.
Action was also constricted by
caution ahead of the latest FOMC policy statement, but the major averages made
some sharp swings with the release of the statement. To no surprise, the target
interest rate was left unchanged at the range 0.00% to 0.25%. Consistent with
past statements, the Fed stated that economic conditions, including low rates
of resource utilization, subdued inflation trends, and stable inflation
expectations, are likely to warrant exceptionally low levels for the federal
funds rate for an extended period. However, the statement went on to indicate
that the Fed is prepared to provide additional accommodation if needed.
Though no specific measures
were stated, the Fed's expression of support attracted enough buyers to drive
the S&P 500 to its best level since May. However, buyers backed away as the
benchmark index lost momentum near the 1150 line.
Treasuries also swung higher
with the release of the policy statement, but they maintained their gains into
the close. The benchmark 10-year Note netted a full point and saw its yield
drop back below the 2.60% level for the first time in about 10 days.
The dollar was dropped for a
1.0% loss. It had already been down before the FOMC made its announcement
because of a stronger euro following a series of successful sovereign debt
offerings from Ireland, Greece and Spain.
Better-than-expected housing
starts and building permits during August were overshadowed by the FOMC
announcement, though construction materials plays (+3.1%) benefited from the
data. Housing starts climbed 10.5% month-over-month to an annualized rate of
598,000, and building permits increased 1.8% month-over-month to an annualized
rate of 569,000.
Financials comprised the worst
performing sector of the session. The sector's 1.0% loss ate into its 2.0% gain
from the prior session.
In contrast, airline stocks
were strong. An increased profitability forecast for 2010 from The
International Air Transport Association sent the Amex Airline Index up 1.9% to
its best level in almost three years.
Soft commodities were the
largest advancing sector in commodities today as it posted a 1.9% gain, led
higher by a 6.2% rally in Nov orange juice futures.
Today's pit session for Dec
gold -which finished lower by 0.4% to $1274.30 per ounce, and Dec silver -which
shed 0.7% to settle at $20.64 per ounce, was pretty quiet for both precious
metals. However, in after-hours trade, a sell off in the dollar index, prompted
by the FOMC decision to keep rates unchanged, both metals spiked into positive
territory. The continuous gold contract traded to a new all time high at
$1288.50.
Nov crude oil ended lower by
1.4% to $74.94 per barrel. It sold off to its lowest levels heading into the
close of pit trade. Oct natural gas rallied for 1.8% to close at $3.93 per
MMBtu. It recouped some of its losses from yesterday's sizeable sell off.
Advancing Sectors: Telecom (+0.3%), Industrials (+0.2%),
Health Care (+0.1%)
Declining Sectors: Financials (-1.0%), Utilities (-0.5%),
Consumer Discretionary (-0.4%), Materials (-0.4%), Energy (-0.1%), Tech
(-0.1%), Consumer Staples (-0.1%)DJ30 +7.41 NASDAQ -6.48 NQ100 +0.00% R2K -0.8%
SP400 -0.6% SP500 -2.93 NASDAQ Adv/Vol/Dec 983/2.14 bln/1636 NYSE Adv/Vol/Dec
1063/1.05 bln/1900