Bonds, Oil Rest After Big Day

U.S. 10-year Treasury bond prices fell slightly today, after a major rally
yesterday on perceived U.S. weakness. Economic reports out yesterday pointed to
major weakness in U.S. economic growth, and led to traders buying bonds for
safety. Bonds typically rise on economic weakness and fall on strength. Today’s
employment reports helped to ease the ascent of bond prices, but it’s clear that
traders are positioned defensively to start the new year.

The dollar fell moderately against the euro and the yen today, after a
government report showed an increase in U.S. jobs. Yesterday the dollar fell
through the floor against both the yen and the euro, on pervasive negative
economic sentiment towards the U.S. Housing troubles, the credit crisis and
slowing growth are all weighing on investor sentiment, and 2008 started out on
sour note for U.S. investors. The euro was near flat on the yen, after making
back significant early losses.

Crude oil futures pulled back after hitting all-time record highs of $100 a
barrel just yesterday. Oil hit the new watermark on the first day of the year,
and many traders took that as a bad sign of things to come. Traders sold oil
today from its overbought, extended highs.

Gold rallied over 1% today, on perceived dollar weakness and record oil
prices. Gold normally trades inversely to the dollar and with oil, and today
gold was playing “catch up,” despite pullbacks in the dollar and oil. Traders
are buying gold as a hedge against dollar weakness and soaring energy prices.
Copper futures jumped more than 4%.

Stocks closed virtually flat on Thursday, after two days of heavy losses.
Crude oil, which hit $100 for the first time yesterday, eased off to settle at
$99.05. Click

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Stock Market Recap

Economic News

U.S. Factory orders rose more than
expected in November.