Is There More To Follow?
Stock index
futures fell for most of the session but staged a dramatic turnaround
on the backdrop of the increasingly likelihood of war. The dollar also backed
off after four days of gains, and bonds continued to head higher. Meanwhile, oil
continued to another new high and gold snapped a six-day losing streak.Â
The selling in stock index futures
accelerated early today even after better-than-expected retail sales and initial
claims reports. Excluding autos, retail sales for January rose 1.3%, far
surpassing estimates of a rise of 0.5%. However, retail sales including autos
fell 0.9%. Following last week’s positive jobs report, initial jobless claims
fell by 18,000 to 377,00 beating estimates of 390,000. Despite the increasing
oversold conditions and positive economic news, the focus is still on the Iraqi
situation. Stock index futures did stage a very impressive turnaround in the
final hour of trading. Dow futures came back from a loss of 120 points, S&P
from a loss of 11 points, and the Nasdaq 100 futures came back from being 20
points in the red. At the close, Dow futures
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S&P
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gained 3 to 961.50.Â
Bond futures rose for the third
straight session as the potential for war continues to escalate. British Prime
Minister Tony Blair indicated that Iraq has missiles which violate UN
resolutions. Chief UN weapons inspector Hans Blix is likely to reveal these
findings as he presents his report tomorrow to the UN Security Council. In the
event that the US goes to war without UN approval, gains in bonds could be
capped. The US would likely bear the majority of the costs of war and would have
to finance the budget deficit by selling even more treasuries. The 30-year
contract
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The dollar index slipped back after a
four day rally. Concerns of war are still weighing heavily on the greenback. The
March dollar index
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$1.08250 against the March euro.Â
Crude oil rose to a 29-month high
today after British Prime Minister Tony Blair claimed that Iraq breached UN
resolution by possessing missiles that have a firing range that exceeds what is
allowed. Also helping to lift crude prices was a potential oil workers strike
from OPEC member Nigeria. Nigeria produces about 2.15 million barrels a day and
accounts for roughly 5.8% of U.S. imports. March crude gained 0.58 at 36.36.
Gold snapped a six-day losing streak.
April gold
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