My OperaStocks Continue to Slide on Economic Worries
Friday, June 24, 2011 7:42:28 PM
Traders on Wall Street ratcheted up the selling pressure once again Friday as a steady stream of data continued to point to slower economic growth and the possibility of a return to recession. Despite Europe agreeing to a new bailout of troubled Greece, investors were clearly in no mood to continue holding stocks through the weekend.
The perception of increasing risk in the marketplace pushed stock prices lower across the board led by the tech-heavy Nasdaq which was off by nearly 1.5% on the day. Tech giant Oracle helped to push the sector lower after it shed nearly 4% after reporting a second consecutive quarter of lower than expected hardware sales. The Dow Jones Industrial average didn't fare much better dropping 110 points late in the day to well below the 12,000 level. The dollar gained ground against the Euro as rumors of brewing trouble in the Italian banking sector spooked would-be buyers of the European currency. Safety and aversion to risk was the theme of the day as money poured into U.S. treasury bonds pushing the yield on the ten year note to the lowest levels seen so far this year.
Crude oil prices managed to hold steady after a steep drop on Thursday following the announcement of a planned release from the Strategic Oil Reserve. Oil prices were up three-tenths of one percent to $91.30 with just under 30 minutes remaining in the New York trading session.
Commodities were unable to escape the selling as both gold and silver moved lower while the dollar advanced. Gold has now declined by over $50 per ounce in the past two trading sessions and currently sits very close to the key psychological level of $1500. It will be interesting to see if gold and silver remain under pressure next week ahead of the new Dodd-Frank Wall Street Consumer Protection Act regulations that will eliminate leveraged retail trading in precious metals. If additional losses push gold and silver prices below key levels of support, there is a real possibility that a trend reversal in commodities could take place. This would serve to validate the argument put forth by several industry experts that the multi-year bull market in gold could soon be coming to an end.
For right now, it appears that the market will need to be convinced that a viable long-term solution to the Greek debt crisis is in place and that the economy is back on a steady path towards recovery before any meaningful rally can take place.
The perception of increasing risk in the marketplace pushed stock prices lower across the board led by the tech-heavy Nasdaq which was off by nearly 1.5% on the day. Tech giant Oracle helped to push the sector lower after it shed nearly 4% after reporting a second consecutive quarter of lower than expected hardware sales. The Dow Jones Industrial average didn't fare much better dropping 110 points late in the day to well below the 12,000 level. The dollar gained ground against the Euro as rumors of brewing trouble in the Italian banking sector spooked would-be buyers of the European currency. Safety and aversion to risk was the theme of the day as money poured into U.S. treasury bonds pushing the yield on the ten year note to the lowest levels seen so far this year.
Crude oil prices managed to hold steady after a steep drop on Thursday following the announcement of a planned release from the Strategic Oil Reserve. Oil prices were up three-tenths of one percent to $91.30 with just under 30 minutes remaining in the New York trading session.
Commodities were unable to escape the selling as both gold and silver moved lower while the dollar advanced. Gold has now declined by over $50 per ounce in the past two trading sessions and currently sits very close to the key psychological level of $1500. It will be interesting to see if gold and silver remain under pressure next week ahead of the new Dodd-Frank Wall Street Consumer Protection Act regulations that will eliminate leveraged retail trading in precious metals. If additional losses push gold and silver prices below key levels of support, there is a real possibility that a trend reversal in commodities could take place. This would serve to validate the argument put forth by several industry experts that the multi-year bull market in gold could soon be coming to an end.
For right now, it appears that the market will need to be convinced that a viable long-term solution to the Greek debt crisis is in place and that the economy is back on a steady path towards recovery before any meaningful rally can take place.
