Buy on the rumor and sell on the fact was Tuesday's theme. A very strong ISM manufacturing report, getting an appreciable boost from cash for clunkers, shot past 50 to 52.9, sounding the beginning of recovery in the sector. But a plus 50 reading was already expected and whether cash for clunkers merely pulled activity from future months is an open question. The session's housing data were also strong with another big gain for pending home sales and a big jump for single-family construction. Unit vehicle sales rounded out the good news, jumping more than 20 percent and pointing, tentatively, to gains for the August retail sales report.
But the market wasn't impressed as the S&P fell 2.2 percent to just below 1,000. But the drop isn't worrying investment strategists who say a 5 to 10 percent correction may be in store and would in fact be healthy, setting the market up for big gains further down the road. The dollar benefited from the move out of equities and toward safety with the dollar index up 0.8 percent to 78.84. Most commodities moved lower in line with equities and in line with the rise in the dollar with oil losing about $1-1/2 to end at $68 and copper losing nearly a nickel to $2.80. But strong dollar or not, gold keeps holding firm, ending at $957.
No comments:
Post a Comment