Wednesday was yet another slow day on Wall Street, with below average trading volumes and a lack of meaningful data releases or earnings report failing to give stocks much direction. Major U.S. indexes managed to squeeze out modest gains, as the S&P 500, Dow, and NASDAQ all finished the mid-week session session slightly higher. As stocks tacked on gains to an impressive 2010 performance, commodity markets were mixed. Gold climbed higher once again, while oil dipped slightly.
The iShares MSCI Brazil Index Fund (EWZ) was one of the biggest gainers on Wednesday, finishing up nearly 2.5%. Brazilian equities climbed after an encouraging report showing that general inflation slowed in December compared to November, and the figure came in below analyst expectations. Earlier in the week, Brazilian shares had slumped as economists predicted that inflation would push higher this year and next. Also giving EWZ a boost in today’s trading was top component Petrobras, which makes up close to 20% of EWZ assets, jumped after the oil giant declared the massive Tupi and Iracema presalt oil and gas areas commercially viable. According to a a document sent to Brazil’s National Oil Regulator ANP, two fields hold a total of 8.3 billion barrels of oil equivalent recoverable volume.
Among the losers in Wednesday trading was the U.S. dollar, as the greenback fell against most of its major rivals. The dollar hit a seven week low against the Japanese yen and slid against the euro as well after U.S. government bond yields fell following a solid auction of debt. After a weak sale of five-year Treasuries, a $29 billion auction of seven-year notes drew surprising interest, sending yields lower and diminishing the appeal of the dollar. “The reaction in the bond markets is fairly sharp,” said Vassili Serebriakov, currency strategist at Wells Fargo in New York. “There’s a broader move towards a weaker U.S. currency.” The PowerShares DB U.S. Dollar Index Bullish (UUP), which offers exposure to the dollar relative to a basket of developed market currencies, dropped almost 0.7% on the day.
Disclosure: No positions at time of writing.