Breaking Wall Street Market News & Reports

Stocks staged gains in the first few sessions of September, but market participants returned from Labor Day ready to sell. Their efforts were focused on financials and other cyclical plays. In the four sessions leading up to Labor Day weekend the S&P gained more than 5%. In the wake of such a heady move came rekindled concerns about the health of European banks. That invoked stiff selling among bank stocks. Weakness among large-cap banking issues undermined the broader financial sector. As such, financials fell to a collective loss of 2.4% and closed at session lows. Profit taking also undercut other cyclical plays, like consumer discretionary stocks and energy stocks. Both of those sectors fell 1.6%.

Still, such widespread weakness stoked volatility. That sent the Volatility Index (VIX) up almost 12% from the four-month low that it set late last week. Amid the stock market’s slide and the increase in volatility Treasuries attracted strong support – the benchmark 10-year Note climbed almost a full point and the 30-year Bond tacked on two full points.

Results from an auction of 3-year Notes were largely lackluster. The auction drew a bid-to-cover of 3.2, dollar demand of $105.9 billion and an indirect bidder participation rate of 42.4%. The four previous auctions held an average bid-to-cover of almost 3.3, dollar demand of about $116.3 billion, and an average indirect bidder participation rate of 44.6%. The greenback made a big gain by climbing 0.9% against a basket of competing currencies. Most of the move was against the euro, which dropped 1.4% in its steepest single-session slide in nearly four weeks.

Favor for safety also sparked buying in the yen, which set a fractionally improved 15-year high of 83.5 yen per dollar. Japan’s central bank brought little surprise with its decision to keep its benchmark lending rate at 0.1%.

Gold New High

Gold prices settled at a new high Tuesday as investors sought the safety of the metal on news that the eurozone stress tests were weaker than previously reported. Gold for December delivery closed $8.20 higher to $1,259.30 an ounce. The gold price Tuesday has traded as high as $1,261.60 and as low as $1,246.40 during the session. The U.S. dollar index was rising 0.81% to $82.74 while the euro was falling 1.25% to $1.27 vs. the dollar. The spot gold price Tuesday was soaring $11, according to Kitco’s gold index.

Tags: gold, new high

This entry was posted on Tuesday, September 7th, 2010 at 12:34 pm and is filed under Contributors, Stock Market News. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.