YAHOO [BRIEFING.COM]: The
stock market mustered its first gain of the week on Friday. The gain, although
modest, came as participants moved to cover their positions following four days
of concerted selling.
Action in the final session of
the week was a bit boring, given the volatility of the preceding sessions.
Stocks essentially spent the session chopping along in mixed fashion. The
action came as participants displayed a sense of uncertainty regarding the
market's treatment of headline risk related to tenuous global economic
conditions and precarious financial conditions in Europe ahead of the weekend.
Just last week traders were feeling more confident about those themes,
resulting in five straight gains for stocks.
Following only the second
weekly advance in almost two months, the risk trade was abruptly switched off at
the start of this week. Traders showed disappointment over the lack of progress
by Greece in establishing an austerity plan that would secure it financial
assistance from the Troika. Reflecting the deterioration of financial
conditions in the Eurozone's periphery, Italy had its debt downgraded by
analysts at Moody's, but that decision really wasn't too surprising.
Sentiment really began to sour
with the midweek announcement by the FOMC that it will purchase $400 billion of
Treasuries with maturities of six years to 30 years, while selling an equal
amount of Treasuries with a remaining maturities of three years or less, by the
end of June 2012. The plan, labeled "Operation Twist" by traders, was
generally in-line with what had been expected on Wall Street, but it seemed
less than accommodative in light of the Fed's statement that downside risk to
economic growth remain high.
Stocks responded to the Fed's
statement by tumbling to a loss of almost 3%. Stocks then fell more than 3% the
next day as selling pressure was perpetuated by aggressive selling abroad.
Although the bloodletting eased on Friday, the stock market still suffered a
weekly loss of 6.5%. That marks the seventh weekly slide in nine weeks time.
The resumption of the stock
market's downtrend drove masses of traders into Treasuries. As a result, the
yield on the benchmark 10-year Note dropped to a record low of less than 1.70%.
It moved back above 1.80% on Friday, though.
The dollar also benefited from
a flight to safety. Relative to a basket of major foreign currencies, the
greenback climbed to a seven-month high, but wavered a bit in the final session
of the week.
Precious metals continued
their slide today. Specifically, gold prices closed pit trade at $1645 per
ounce to log a 5.6% loss. That came on top of the near 4% loss that it had
suffered in the prior session. For the week, gold prices shed about 9%. As for
silver, it dropped a precipitous 16.5% today, settling at $30.56 per ounce.
That extended the near 10% drop that it experienced in the prior session.
Silver ended the week 25% below where it began.
Oil prices were down in the
early going as participants looked to extend the energy component's prior
session loss of 6.3%. The energy component was actually below $78 ahead of pit
trade, but was able to settle at $80 per barrel to eke out a 0.2% gain. That's
only about a half dollar below where it began the week. As for natural gas
prices, they finished flat at $3.70 per MMbtu after a positive start to today's
trade. Natural gas prices were down about a dime for the week, though.
Interestingly, gold failed to
attract safety seekers. Instead, the precious metal was caught up in the
sell-off that slammed other commodities. Gold prices finished pit trade on
Friday at $1645 per ounce for a 5.6% loss, but for the week the precious metal
fell about 9%. Overall, commodities fell almost 7%, according to the CRB
Commodity Index. DJ30 +37.65 NASDAQ +27.56 NQ100 +1.0% R2K +1.4% SP400 +1.3%
SP500 +6.87 NASDAQ Adv/Vol/Dec 1750/1.98 bln/818 NYSE Adv/Vol/Dec 1901/1.23
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