Daily Market Reports | Jul 26 2008
By Greg Peel
The Dow closed up 21 points or 0.2% while the S&P gained 0.4% and the Nasdaq had a good day, up 1.3%.
The Nasdaq saw a return to positive sentiment following a week where the tech sector fretted over Apple guru Steve Jobs’ health. A networking hardware specialist called Juniper jumped 18% on a revised profit forecast of some 5% above estimates, and dragged the rest of the techs along with it. But for the Dow and broad market it was a case of early strength followed by a slow wane. The Dow was up 94 in early trade but in the red at 3.30pm.
The broad market took heart in yet another drop in the oil price and a rare set of slightly more positive economic data. The US$2.23 fall in oil to US$123.26/bbl was attributed to ongoing concerns of a slowing economy.
However the June durable goods number came in at 0.8% growth which was much healthier than Wall Street had expected, and represented the first rise in five months. However, on closer scrutiny it appeared the government had ordered quite a lump of military hardware in June. The Michigan University consumer sentiment index for July came in at 61.2, up from 56.4 in June and in the opposite direction to consensus, which had pencilled in 56.0. Lord only knows what Americans were feeling good about this month, but these are still very low figures over all.
The real focus was on the June new home sales number. After a shock, much-worse-than-expected existing home sales number on Thursday, Wall Street was braced for more bad news. A fall of 0.6% was, however, actually not as bad as expected. But it was still a fall.
The enthusiasm generated by the data fizzled as the day wore on, nevertheless, and whiplashed traders drifted off to nurse their wounds. The financial sector did not post a recovery, and indeed there were some more big falls. Bank of America fell 3.5%, Wachovia 8%, and Fannie & Freddie had another weak session.
Gold barely troubled the scorer on Friday, posting a US$1.10 gain to US$928.40/oz as the US dollar waxed and waned. The Aussie slipped slightly to US$0.9565.
Base metals reverted back to mixed mode as well, with aluminium and copper up slightly and nickel, lead and zinc all losing 2%.
The SPI Overnight was up 24 points following the local Friday massacre. As Monday dawns, it does so with an unfortunate realisation on Bridge Street that this movie is not yet into the final reel.
