Friday, March 27, 2009

Market Reflections 3/26/2009

News from Linux provider Red Hat best embodies Thursday's upbeat session. Markets moved on a Reuters report that the company thinks the worst has passed, comments repeated by a run of others in the session including retailers Best Buy and Citi Trends. Economic data in the session was not upbeat, including another jump in continuing unemployment claims and a final fourth-quarter GDP headline of -6.3 percent.

Stocks ended at their highs, up 2.3% at 832.65 for the S&P 500 but in another session of light volume. Treasuries were especially strong in the session, highlighted by heavy demand for $24 billion in 7-year notes in an auction that helped renew confidence in the ability of the Treasury to attract buyers. The Federal Reserve is now buying Treasuries in an effort announced last week to lower mortgage rates. The 10-year yield fell 4 basis points to 2.74 percent. The dollar regained about half of yesterday's losses, up 3/4 of a cent against the euro to $1.3522.

Gold posted important gains in the session, up about $5 to $940 despite the gain in the stock market and despite the gain in the dollar. There's plenty of talk among gold traders that Chinese unease with their dollar holdings point to future weakness for the dollar and future gains for gold. Oil also ended firmer, up more than $1 to just over $54.

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