This post was written by CNBC producer, Robert Hum
Stocks are modestly lower this morning as a firmer dollar sends commodities and commodity stocks noticeably lower today.
Ahead of the open, traders had their eyes on 893 on the S&P, a level that the index indeed broke below right soon after the open. If the S&P closes below that threshold today, it would close at its lowest level since before Memorial Day. The Dow is already at 1-month low.
Many big commodity stocks including Freeport McMoRan, Alcoa , AK Steel, BHP Billiton are down mid-single digits as concerns on the true strength of a global recovery are pushing most hard commodities down 2-4 percent in early morning trading.
Also weighing on commodities is the stronger Dollar, which is now at a 2-week high. China hinted that it won’t push for a new global reserve currency to replace the Dollar at the forthcoming G8 meeting, but it’s still willing to discuss the issue if other countries bring it up. While Chinese Vice Foreign Minister He Yafei also said that the Dollar will continue to be “the most important and major reserve currency…for many years to come,” Russian President Dmitry Medvedev stated that “there is no alternative” to the Dollar or Euro today.
Despite today’s commodity price decline, UBS revealed it was raising its 2010 price estimates on copper and silver by 43 percent as well as nickel by 33 percent, as it believes strong Chinese demand will continue to help boost prices.
Elsewhere:
A bankruptcy judge approved GM’s asset sale plan, paving way for the automaker’s quick exit from bankruptcy.
Rio Tinto agreed to sell its Alcan Packaging Food Americas unit to Bemis for $1.2 billion, as it hopes to use the funds to help repay some of its outstanding debt.
Tech firm EMC raised its all-cash offer for Data Domain to $33.50/share, intensifying a bidding war between EMC and Net App, which had made a competing $30 stock and cash bid for the storage manufacturer.
LDK Solar falls sharply after its Q2 revenue forecast disappointed the street. Although the solar wafer maker raised its Q2 shipments slightly fro 220-230 megawatts from 200-220 megawatts, revenues are forecasted to be between $215 million and $225 million, below estimates of $247 million amid continuing pricing pressures.
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