Wall Street started off the holiday-shortened week on a mixed note as a stronger U.S. dollar weighed on a variety of asset classes. Despite a stronger greenback, both the S&P 500 and the Nasdaq managed to post gains of 0.3% while the Dow slid marginally, posting a 0.1% loss. Commodities, an asset class usually crushed by a strong dollar, also saw broad strength as softs, metals, and energy all posted solid days, especially considering the lack of truly bullish news.
While the day was relatively void of market moving events, some ongoing issues helped to move certain sectors. Fears over a Federal Reserve plan to cut debit-card interchange fees once again weighed on American Express as analysts at Stifel Nicolaus cut their rating on the company from buy to hold, pushing down shares of the blue chip giant by more than 6% on the day. Meanwhile, the dollar continued to gain against its chief counterpart, the euro, pushing up to a fresh two week high against the common currency, thanks to continued indecision over how to treat spendthrift members of the zone. “The impasse over the current crisis remains unresolved and continues to undermine confidence in the euro,” said Brian Dolan, chief currency strategist at Forex.com.
One of the biggest winners in the ETFdb 60 was the often volatile United States Natural Gas Fund (UNG) which surged by 3.9% on the day. Today’s gains for natural gas came as investors bought up the fuel thanks to unseasonably cold temperatures across much of the nation and predictions that this cold snap will last well into 2011. For December “we’ve had some remarkable cold for much of the eastern half of the nation,” and in parts of the Midwest, it’s been 10 to 15 degrees below normal, said Alex Sosnowski, a senior meteorologist with Accuweather.com. This news helps to reverse a brutal downtrend in the popular heating fuel, UNG is now down just 2.2% over the past month thanks to Monday’s price surge [see charts of UNG here].
One of the biggest ETF losers was the iShares S&P National Municipal Bond Fund (MUB) which fell by 1.1% in Monday trading. The fall in fortunes for MUB is largely being blamed on a 60 Minutes interview last night in which rising star Meredith Whitney forecast the immediate threat of hundreds of billions in defaults. The in-depth report cast a shadow on the traditionally-solid muni bond market as a variety of municipal bond funds saw large drops in early Monday trading. However, it is important to note that this is just continuing the recent weakness in the muni bond market; MUB is now down 7% over the past quarter [see fundamentals of MUB here].
Disclosure: No positions at time of writing.