On the heels of Tuesday's broad-based rally, stocks once again started out on a high note. However, today's action was more tentative, with the major market indices bouncing between positive and negative territory. Energy stocks led the day's pullback after the government reported an unexpectedly large build in crude inventories, while the Dow slipped into the red after briefly toppling the 7,000 level in early trading. After leading the equities market higher on Tuesday, financial firms also struggled to maintain their positive momentum. Stocks finished the session nearly flat, with the day's unsteady performance lending credence to the theory that yesterday's rally was a mere bear-market bounce.
The Dow Jones Industrial Average (DJIA 6,930.40) collected a modest gain of nearly 4 points, as exactly half of its 30 components muscled into positive territory. The blue-chip barometer tagged an intraday peak of 7,015, marking its first journey above the millennium mark since March 2. Citigroup (C) led the advancing issues, extending Tuesday's surge, while Hewlett-Packard (HPQ) also rallied after a UBS upgrade. Aluminum giant Alcoa (AA) paced the declining blue chips after the company pondered selling a stake to raise cash.
For the first time in a month, the S&P 500 Index (SPX 721.36) cobbled together 2 positive sessions. The SPX closed 1.8 points higher, and notched a second consecutive daily close atop its 10-day moving average. Finally, the Nasdaq Composite (COMP 1,371.64) enjoyed the day's healthiest advance, tacking on 13 points, or nearly 1%, by the close. Sector heavyweight Apple Inc. (AAPL) jumped 4.6% after debuting a new iPod shuffle.
Turning to equities in focus, Goldman Sachs weighed in on financial firms with a downgrade for American Express (AXP) and an upgrade for Morgan Stanley (MS) ... Google Inc. (GOOG) announced plans to launch targeted ads based on its users' Web-surfing habits ... Renewed buyout speculation sparked heavy call volume on Sun Microsystems (JAVA) ... Oracle Corporation (ORCL) emerged as a potential bearish prospect after violating key chart support ... American Eagle Outfitters (AEO) fell short of analysts' fourth-quarter earnings expectations ... and today's Quote of the Day comes from Ira Sorkin, the tight-lipped defense attorney for alleged Ponzi schemer Bernard Madoff. The barrister responded, "No comment," when asked by the New York Daily News whether his client was "a good guy," then quickly added:
"I have no comment about no comment."
But these weren't the only headlines hitting the Street today. Click on the links below for our Daily Market Blog coverage of:
And, in case you missed it, Joseph Hargett assessed the prospects for Family Dollar Stores (FDO) in this week's edition of The Casual Contrarian. Click here to watch the video.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
The Energy Information Administration (EIA) reported today that crude inventories rose by 700,000 barrels last week, defying analysts' expectations for a smaller gain of 400,000 barrels. The agency also reported a weekly slide in gasoline demand, which helped contribute to a drop in crude futures today. Against this backdrop, black gold continued to retreat from the 2-month high it tagged on Monday. By the close, crude oil for April delivery fell 7.4%, or $3.38, to settle at $42.33 per barrel.
Gold futures gained today, thanks in part to a softening U.S. dollar. The malleable metal also caught a technical lift, with buyers moving back into the market after Tuesday's close below $900 per ounce. Gold for April delivery ended the day on a modest gain of 1.7%, or $14.80, at $910.70 per ounce.
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