Why The Dollar Impacted The Stock Market Today
Stocks
were lower Monday as weakness in the dollar triggered a broad-based decline. Only gold
and biotechs were in the green. Biotechs were higher after positive drug test
results from the likes of Medimmune
(
MEDI |
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PowerRating) and Genentech
(
DNA |
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PowerRating), but
pharmaceuticals were down and among the largest losers of the day. The major
indices all closed near the lows of the session. Both
the Dow and S&P are again below their 20-day moving averages. Following Treasury
Secretary John Snow’s comments that the dollar’s recent volatility as “fairly
modest,” the dollar sold off yet again to another four-year low against the
Euro. The greenback is down 8% since the beginning of the year. Bonds are once
again higher, but off session highs. Gold prices also rallied to a three-month
high.
The Dow Jones Industrial
Average
(
$INDU.X |
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PowerRating) was -185.58 at 8,493.39. The S&P 500
(
$SPX.X |
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Chart |
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PowerRating) was -3.53 at 920.77. The Nasdaq
(
$COMPQ |
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PowerRating) was
-45.76 at 1492.77.
The day’s leading sectors were
Gold & Silver
(
$XAU.X |
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PowerRating), +3.13% and Biotechs
(
$BTK.X |
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PowerRating), +1.16%,
Weak today were Internet
(
$GIN.X |
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PowerRating),
-5.26%, Networking
(
$NWX.X |
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PowerRating), -5.18%,
Pharmaceuticals $DRG.X|$DRG.X], -4.35%, and Semiconductors
(
$SOX.X |
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Chart |
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PowerRating), -4.96%.
In economic news, April
Leading Economic Indicators came in at +0.1%, or as expected. The Conference
Board said that the economy is not losing momentum, but is growing very slowly.
This will be a light economic week as only the Treasury Budget (Tuesday) and
Initial Claims (Thursday) are still on tap.
The 10-year U.S. Note
finished +050 at 118 060.
The dollar finished -0.28 at
93.90.
Gold finished +1 at 365.4.
Crude Oil finished +0.01 at
28.84
Volume finished at
1,355,575,000
on the NYSE, and at 1,663,261,000 on the Nasdaq.
Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 2.11, and down
volume over up volume by a 6.67 ratio. Nasdaq advancing issues were over declining
issues at 2.13, and down volume over up volume is at a 3.85 ratio.
Top Dow stocks are:
Altria Group
(
MO |
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PowerRating), +0.22 at
33.52, and Coca Cola
(
KO |
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PowerRating), +0.16 at 44.11.
Stocks in the news:
Campbell Soup
(
CPB |
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News |
PowerRating)
was up on triple its average volume. The food giant reported third
quarter results up 17% from year-ago levels and topped estimates by 2
cents. The company also upped its full-year target to between $1.49 to $1.51,
compared with Wall Street estimates of $1.47. CPB closed at 22.95, up 1.50.
Genentech
(
DNA |
Quote |
Chart |
News |
PowerRating) was
up almost $17.00 on extremely heavy volume. The company reported positive Phase III
trial results of its colon cancer drug, Avastin. Wall Street has been negative
on the drug as it has previously failed in testing on breast cancer. DNA closed
at 54.85, up 16.95.
Wireless communications giant
Qualcomm
(
QCOM |
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News |
PowerRating) reaffirmed its third-quarter
and full-year estimates of 23 cents and 84 to 87 cents, respectively. QCOM
closed 30.27, down .03.
American Greetings
(
AM |
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Chart |
News |
PowerRating) said it sees first-quarter results between 25 to 30 cents a share, or below
analysts’ estimates of 46 cents a share. AM closed at 16.16, down .29.
Home improvement retailer
Lowe’s
(
LOW |
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Chart |
News |
PowerRating) was off on heavy volume. The company reported
first-quarter results up 20% from year-ago levels and topped estimates by a
penny. However, revenues came in at $7.21 billion, while estimates were calling
for $7.4 billion. Looking forward, the company is forecasting second-quarter
results between 68 to 70 cents a share, or in line with estimates. LOW closed
down 4 at 40.30.