Fundamentals

U.S. Equities Open Week With Mixed Results

U.S. Session Key Developments

•    Dow Jones Industrial Average Returns to Positive Territory For 2010
•    Jobless Claims Slightly Better Than Expected, Home Sales Plunge
•    Commodities Decline as Greenback Gains Against European Counterparts

U.S. stocks were generally higher today following mixed trading in Europe’s session as well as the Asian session overnight.  The Nasdaq rose slightly on strength in technology shares, but the Dow Jones Industrial Average and S&P 500 each closed lower on the day.  There was very little action on the trading day, however, as only 7.1 billion shares exchanged hands on U.S. indices- the second-lowest amount of the year.  On the other hand, the VIX volatility index rose for the first time in nine days as investors seem unsure of what lies ahead for the world’s stock markets.  As for commodities today, crude oil continued its rise, trading near $82 a barrel at session close.  Precious metals were on the decline, however, as gold fell to $1123 on the COMEX and silver fell towards the $17.20 level.  The U.S. Dollar Index held above the 80 level for a third consecutive day, gaining against the British Pound but falling against the euro.

DJIA 30                     10,552.52                      -13.68                       -0.13%
The Dow Jones Industrial Average posted the weakest performance among major U.S. indices as 18 of the 30 Dow stocks closed lower on the day.  3M Co posted the biggest loss on the index, dropping 1.3 percent, while American Express and Bank of America fell over 1 percent each to lead financial shares lower.  On the positive side, McDonald’s shares gained over 2 percent as strong overseas growth led to a 4.8 percent increase in sales for the world’s largest fast-food chain.  Verizon shares also gained today, after the company announced plans to expand its next-generation wireless broadband beyond its initial test sites of Boston and Seattle.

S&P 500                       1,138.50                           -0.20                       -0.02%
The broad-based S&P 500 ended its six-day rally today  on weakness in industrials and health care.  Health care stocks fell 0.4 percent as U.S. President Barack Obama leads a final push to overhaul the medical industry in the United States.  Davita shares were the worst performing among the health care sector, falling over 2.4 percent, while shares of UnitedHealth and Coventry Health dropped at least 1.7 percent each.  Other shares with unusual moves today included AIG, which rallied over 3 percent after agreeing to sell its American Life Insurance Co. unit to MetLife.

NASDAQ                     2,332.21                         +5.86                     +0.25%
The tech-heavy Nasdaq was the best performer among major U.S. indices as technology stocks rose nearly 0.5 percent on the day.  Cisco shares rallied over 3 percent after JPMorgan initiated coverage of the stock and word that the technology firm would be making a major announcement tomorrow.  BlackBerry maker Research in Motion rose 4 percent after a BMO analyst upgraded his estimates and price target on the shares.  As for non-technology shares on the index, IMAX Corp. rallied over 8 percent following a successful weekend opening of Disney’s 3D film “Alice in Wonderland.”

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com