Tuesday, March 8, 2011

Daily Dow Jones: Range Bound Trading Ahead , 08-03-2011

The Dow Jones falls 80 points, its 2nd straight decline. The Dow dropped as much as 128 points intraday amid surging oil prices and Greece’s latest debt woes. Sentiment was also dampened by brokers’ downgrade of the technology sector.

Oil advanced 0.3% to US$104.8/barrel after rising above US$106/barrel whilst gold trimmed gains after rallying to as much as US$1446/ounce, an all-time high. Ten-year Treasury note yields slid five basis points to 3.51%.

Oil prices set the tone for equity markets yet again as crude futures hit new 2-½-year highs on concerns that a protracted civil war is brewing in Libya. Sentiment wasn’t helped by a rating cut for the semiconductor sector while a sovereign debt downgrade in Europe was a subtle reminder that this brushed-under-the-carpet issue simply refuses to go away.

Investors outside the U.S. have boosted their holdings of longer-maturity Treasuries to the highest level since the credit markets froze in 2008, helping curb rising yields amid concern inflation is accelerating. International buyers held 90% of their US$4.44tr of U.S. government debt in notes and bonds as of December, the same as in September 2008 when Lehman Brothers Holdings Inc. collapsed. The ratio fell to 83% in October 2009 as investors sought the safety of Treasury bills with the U.S. economic recovery still in question.

Daily Dow Jones: Range Bound Trading Ahead

Source: StockCharts.com

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