Wednesday, September 16, 2009

Market Reflections 9/16/2009

Industrial production showed a second month of strong gains for manufacturing, pointing to recovery as early as July and echoing Ben Bernanke's comments that the recession is probably over. Manufacturing isn't the only sector on the mend. Housing data continue to show gains, this time it was the homebuilders index which posted a third straight monthly increase. The CPI was skewed higher by energy prices and didn't see much effect from cash-for-clunkers, leading a Bureau of Labor Department official to argue that dealers must have pocketed some of the stimulus.

The S&P rose 1.5 percent to an 11-month high of 1,068, but the central focus of the markets is probably the dollar which continues to decline. The dollar index fell 0.4 percent to end at a new 12-month low of 76.19. The weak dollar is helping commodities including gold which ended near $1,020 with silver continuing to outpace gold's gains, ending at $17.40 for a nearly $1 jump on the day. Oil, up more than $1 to $17.25, got a special lift from a large draw in weekly crude stocks.

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