U.S. equities finished Thursday relatively flat as investors digested mixed earnings reports from a variety of important sector leaders. The Dow finished the day down 0.2% while the Nasdaq and the S&P 500 both rose and ended up 0.2% and 0.1%, respectively. Meanwhile, commodity markets surged thanks to a weaker dollar which fell against a variety of major world currencies. Gold rose by $21/oz. while silver and grains both finished the day higher as well.
The big movers on the day were basic materials firms following reports of steep losses for Halliburton and 3M. Halliburton reported that the company knew that it was using faulty cement for the Deepwater Horizon oil rig which eventually exploded in late April, creating one of the biggest environmental disasters in U.S. history. This news pushed down the shares of HAL by as much as 10% during the day before the company gained back some ground late in Thursday’s session. Meanwhile, 3M did not fare much better due to its earnings report which narrowed its 2010 profit target and sent the stock reeling by almost 7% in Thursday trading. However, it wasn’t all bad in the market today as ExxonMobil reported a stellar quarter which saw profits leap by 55% on the back of stronger commodity prices and refining margins, news that helped to boost the company’s share price up by 1.1% on the day.
The ETFdb 60 Index rebounded by 2.65 points, or 0.2%, in moderately heavy trading. Winners outnumbered losers by two-to-one on the day.
One of the biggest gainers on the day was the United States Natural Gas Fund (UNG), which soared by 3.3% in Thursday trading. Today’s gains came after the EIA storage report showed a smaller-than-expected build up of inventories, much to the delight of traders who had seen UNG sink by over 7% in the last two weeks. The report showed that natural gas stocks rose by 71bcf, slightly below the analysts’ consensus of a 73bcf buildup. “There is some minor enthusiasm” after the storage report, but “it’s somewhat fleeting,” said Cameron Horwitz, an analyst with Canaccord Genuity. “The reality is that we have a lot of supply out there.” [see Thursdays With UNG]
One of the biggest losers in the ETFdb 60 was the PowerShares DB US Dollar Index (UUP), which sank by 1.1% on the day. Investors once again fretted over the impact of a second round of QE from the Fed and sold off dollars in anticipation of this program’s impact on the greenback. The U.S. dollar index fell by 1% and the currency experienced the biggest losses against the euro (-1.2%), pound (-1.1%), and yen (-0.9%). “Trends are starting to resume again in the currency markets,” said Dick Pfister, head of global sales and consulting at Altegris Investments Inc. in La Jolla, California. “It doesn’t help the dollar that the Fed keeps printing money and Bernanke keeps telling everybody he is going to flood the system with more cash. We are likely in for a long haul of quantitative easing, which is going to keep these trends going.” [see more information on UUP's Fact Sheet]
Disclosure: No positions at time of writing.