Deja Vu as Dow Trades in Tight Range...For Now
The Dow has traded in a “tight” 290-point range today. Sound familiar? Well, that’s what happened yesterday, too… until the last hour of trading when the markets’ volatility reappeared, especially in the last few minutes of the trading day.
Just before midday, the markets hit the lows of the day, but since then, they have gradually climbed back up and are now re-approaching the morning’s highs. The advance has been fairly broad-based as advancers are leading decliners 4 to 1 at the NYSE. Utilities, energy, and tech stocks have regained the momentum that they lost this morning and are leading the markets’ move up this afternoon.
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What have been volatile today are the commodities and commodity stocks. Commodities, which started the day modestly higher, turned south as the dollar strengthened throughout the morning. At their settlement today, metals we were weak as copper finished down 9%, aluminum ended down 4%, and gold finished down 2%.
Energy also posted declines as crude oil fell 2% and natural gas dropped nearly 5%. As commodities fell in the morning, commodity stocks followed suit. At one point, Goldcorp fell 16% off its high, Alcoa fell 7% off its high, and Exxon Mobil fell nearly 6% off its high.
One big weak spot today is the insurance sector. Hartford Financial has lost half of its value after posting a big loss, triggering greater concerns about its current capital position. Other insurers, including Lincoln National and Prudential Financial, are also down double digits today.
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