Here’s What Pushed The Greenback Lower Today
Equities rallied today,
pushing benchmark gains above 1%, while Treasuries finished mixed.
Equity
US stocks rose for a second straight day, led by
pharmaceutical shares — after the second-largest maker of stents (a device used
to prop up blood vessels) announced that it planned to file for US approval of
its drug-coated versions. Integrated oil and gas stocks rose after OPEC voted
not to raise production levels, and after the US Department of Energy reported
that domestic reserves fell by a larger-than-expected 4.6 million barrels a
week. Health care equipment shares gained traction after the third-largest maker
of implantable defibrillators was upgraded to “buy” from “hold” on higher
expected revenue. The industrial conglomerate and diversified bank indexes were
also among the top performers.
Conversely, Semiconductor shares
led declines after the world’s largest maker
of mobile telephone chips said second-quarter sales and profits would increase
less than forecast. Tobacco stocks waned as the largest U.S. tobacco company
continued to face legal battles waged by sick smokers. Personal products,
footwear, and specialized finance shares were also among the weaker issues.
The Nasdaq future
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up 10.50 to finish at 997.20,
and the Dow
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Fixed Income
US Treasuries stabilized today, ending steady to
slightly weaker on the day but well off of earlier highs. Markets initially
rallied on more worries about investigations at Freddie Mac, but the
underperformance of the Agencies didn’t last long. Comments from Fed officials
were on the dovish side, with Fed Gov. Ferguson noting low probability for
deflation here in US, pointing to varied tools available to the Fed and already
very aggressive response to slower growth.
Fed’s Beige book highlighted sluggish activity
and the 5Yr note auction was weak. After reaching new highs Treasuries reversed
course on positioning ahead of tomorrow’s release of retail sales. ended the day
higher after Federal Reserve Governor Donald Kohn said that inflation is falling
slightly faster than the Fed had expected. The 10 year futures contract
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-01 at 121-10; and the five year note was down -45 at 116-155
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Metals
July gold
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355.50, after yesterday’s rout, on the back of dollar weakness. Silver
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up .5 at 4.50. Copper was up .05 at 76.80
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down .0030 to close at .6485.
Energy
July crude
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32.36 after the US Department of Energy reported that domestic reserves fell by
a larger-than-expected 4.6 million barrels a week. Natural gas was up .007 to
close at 6.220
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Currencies
The dollar was lower after the European Central
Bank president curbed expectations the bank will cut rates any time soon. The USD index
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down by .60 and
finished at 93.43.