As earnings reports continued to trickle in Wednesday most equity benchmarks declined, and the Dow finished below the 10,000 mark it breached just last week for the first time in a year. Many bond funds finished up for the day as risk appetite among investors dried up. Commodities continued a strong run as the dollar fell to new lows against many of its major rivals. The ETFdb 60 Index, a benchmark designed to measure the performance of the investment universe available through exchange-traded products, fell 3.22 (0.3%) to finish at 1,019.46. The benchmark is still up nearly 2% on the month.
A weak dollar has fueled commodity prices in recent weeks, and Wednesday was no exception. The euro rose above $1.50 for the first time in more than a year as the greenback continued to lose safe haven appeal. The dollar’s steady slide has contributed to a sharp rise in commodities, led by copper. The iPath Dow Jones-UBS Copper Total Return ETN (JJC) rose almost 3% on Wednesday as copper hit a 13-month high. Mining giant BHP Billiton declared force majeure at the Olympic Dam mine in Australia, the world’s fourth largest. Losses from the incident, estimated at about 70,000 tonnes, could have an impact on global supply this year. Commodity prices have surged this year on hopes on increases in manufacturing activity in the fourth quarter and the beginning of 2010.
Not all commodities participated in Wednesday’s rally. The United States Natural Gas Fund (UNG) declined 2.1%, giving back most of the previous day’s gains. UNG had jumped on Tuesday as an upbeat outlook from Caterpillar stirred hopes of a rebound in manufacturing activity.
Disclosure: No positions at time of writing.