Two Factors Weighing On The Market…
Two important issues are weighing both on
stocks and the dollar: elections and interest rates. Today the dollar fell to a
3 1/2-month low against the euro on concern the world’s biggest economy will
slow, curbing demand for US assets, even after an expected Federal Reserve
interest-rate cut tomorrow.
The dollar also fell for a ninth day in 10 against the yen as traders said a
rate reduction would make returns on dollar deposits less attractive. Twenty-one
of 22 bond firms that trade with the Fed forecast it will cut the 1.75 percent
benchmark rate. The Fed decision will follow today’s US elections, where
control of Congress is at stake. The Dec. dollar
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106.03 down .23. The Dec. euro
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and the Dec. yen
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The Dec. S&P 500 futures
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formed a double bottom on the intraday between yesterday’s and today’s action.
There was a nice rally up from the 905 level to the 915 level between the 1:30
PM EST area to just about the close. the action was pretty choppy most of the
day. SPZ2 closed at 914 up 7.09 and above support at 900.
The Nasdaq futures for Dec.
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were negative for a good portion of the trading session. By the end however a
mini rally was ushered in and the NDZ2 stayed above the support of 1040 before
closing at 1051.50 up 9.00.
Crude oil fell to a four-month low on
expectations that a revised US resolution at the United Nations setting
arms-inspection terms for Iraq will delay any military action against the
Persian Gulf oil producer, according to Bloomberg.com.
The resolution may satisfy French and Russian demands that an attack be approved
by the UN Security Council, traders said. The US has threatened to use force
without UN consent to rid Iraq of weapons of mass destruction. Oil has fallen
14% since September as the slow pace of negotiations at the UN signaled that
any action against Iraq is still months away.
Crude oil for December
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to $26.14 a barrel on the New York Mercantile Exchange, the lowest closing price
for a contract closest to delivery since July 9. Heating oil and gasoline also
fell in trading today. The Dec. contract of heating oil
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dropped 1.53 cents to 71.79 a gallon. Dec. unleaded gasoline
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closed at 74.06 a gallon down 3.27 cents or 4.24%. Natural gas for Dec.
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Most of the grains were weak today. Dec wheat
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In the metals, Dec. gold
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.42 to close at $318.60 a troy ounce. Dec silver
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end at $4.495 and Dec. copper
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at 72.54 a pound, a loss of .35.