Friday, November 20, 2009

FusionIQ Market Wrap for 11/20/09-Market ends week on cautious note....

U.S. equities fell for a third straight day, with the S&P 500 dropping 0.2 percent over the past five days to cap its first weekly decline since October. The Dow Jones Industrial Average lost 14.28 points, or 0.1 percent, to 10,318.16 and was up 0.5 percent in the week. Declines were limited today as Pfizer Inc. and Merck & Co. led gains in drugmakers while J.M. Smucker Co. paced an advance in consumer staples companies.  The tech-focused Nasdaq Composite Index was off 0.5%, hurt in part by a 9.3% decline in Dell. The S&P 500 was off 0.3% at 1091, led by a 0.7% decline in the energy sector.

The S&P 500 rose as much as 64 percent from a 12-year low in March, closing at a 13-month high on Nov. 17. The deepest U.S. economic contraction in seven decades ended in the third quarter, when government incentives spurred spending on homes and cars. Corporate profits, which have shrunk for a record nine straight quarters, are projected to rise in the current period, according to analysts.  Confidence that the Federal Reserve will keep its interest-rate target near zero well into 2010 lifted major stock indexes to fresh 13-month highs earlier this week. Traders and analysts say the flow of cheap money now is going into other assets.

The dollar rallied against the euro and most other foreign currencies after the European Central Bank took steps toward unwinding stimulus measures installed to buoy the financial system after the global credit crisis last year. The bank said in a surprise announcement that it will tighten the standards under which it accepts newly issued asset-backed securities as collateral from banks.  The dollar's gains weighed on commodities.  Oil futures were off about 74 cents, hovering at $77 a barrel in New York. But gold managed a gain of $8.40 to trade at $1,150 per ounce in New York.


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