Market Snapshot for September 23, 2011 (10:00 pm ET):
- Closing Prices: DOW 10,771.48 (+37.65, +0.35%),S&P 500 1,136.43 (+6.87, +0.61%), NASDAQ 2,483.23 (+27,56, +1.12%), Nikkei 225 8,560.26 (-180.90, -2.07), DAX 5,166.56 (+32.35, +0.63%), FTSE 5,066.81 (+25.20, 0.05%)
- OIL 79.85, GOLD 1,639.80, SILVER 360.101
- EURO 1.3496, YEN 76.58, BRITISH POUND 1.5466, U.S. DOLLAR INDEX 79.23
Commodity Collapse Continues
This past week was a rough one for the markets, but particularly for precious metals. The indices were on unsteady feet as the week began, teetering at daily resistance with the latest FOMC meeting on the near horizon. It was the Fed's announcement on Wednesday afternoon that finally tipped the scale. The precious metals, however, were already moving lower for the month and had only paused as the market rallied the previous week. When the Fed stated that it continued to foresee significant economic weakness and concerns regarding the larger global economy, the selloff escalated. Even China's economy has shown signs of contraction, while Greece has inched even closer to defaulting on its debt.
Silver took one of the greatest beatings, losing about a quarter of its value over just a couple of days. Meanwhile, gold shed about 9% for the week. There is no rapid recovery likely on the horizon, although the selling pressure should begin to abate this week. The U.S. dollar has once again become somewhat of a safe haven as investors make the move to cash. It hit a seven-month high this past week.
Dow Jones Industrial Average (Figure 1)
A Hot Mess
On Friday the market took a breather from Wednesday and Thursday's plunge, but the Dow Jones Ind. Average ($DJI) still ended the week lower by 6.4%, which was the largest one week loss since October, 2008 (although that week was substantially worse with a loss of over 18%). The pace of the week's selloff was the strongest following the Fed and slowed on Thursday, but the magnitude did not diminish.