Commodity prices plunge, stocks extend correction

Gold was lower by nearly 3% on Thursday and settled at $1,481.40 an ounce, which was under the psychologically key level of $1,500. Meanwhile, silver was off more than 27% for the week when it settled at $33.72 an ounce.

S&P 500 (Figure 2)

Although the selling was well under way by the time the morning's economic data hit on Thursday, the latest unemployment numbers did nothing to relieve worried investors. Last week's jobless claims rose unexpectedly to a seasonally adjusted 474,000. This was 43,000 higher than the week before. The main event, however, remains on the horizon. On Friday morning the non-farm payrolls data will hit the wires. Unemployment is expected to remain steady at 8.9%, but everyone seems braced for bad news. Due to the rapid downside action on the 15 minute time frame in the indices, there is further room for the market to move lower, although we should see the free fall in gold and silver start to wane as exhaustion takes hold ahead of the weekend.

The Dow Jones Industrial Average ($DJI) ended the day with a loss of 139.41 points, or 1.1%, and closed at 12,584.17 on Thursday. Only three of the Dow's thirty index components posted a gain, and the gains were fractional. The leaders were Intel (INTC) (+0.47%), Disney (DIS) (+0.16%), and Cisco Systems (CSCO) (+0.06%). The weakest performers were Alcoa (AA) (-2.63%), Exxon Mobil (XOM) (-2.58%), Chevron (CVX) (-1.97%), and General Electric (GE) (-1.83%).

Although the Dow Jones Ind. Average had a very difficult session, the same was not true for the Dow Jones Transportation Average. Falling oil prices were met with excitement in the airlines in particular. AMR Corp. (AMR) rose 7,.48%, while Delta Air Lines (DAL) ended the session higher by 7.16%, and United (UAL) rose 5.74%.

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