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In Case You Missed Wednesday

Stocks don't take advantage of lower oil


Oil down, stocks down?
  • Yes, it actually happened — we’ve been reading about how the inverse relationship between oil prices and stocks was breaking down, but it didn’t seem so in-your-face as it was on Wednesday. Oil finished below $105 a barrel, but stocks…well, they just laid there, finishing just on the red side of flat. Less true for tech stocks and small-caps which underperformed. This isn’t a complete coincidence — traders have spent much of the past few weeks sifting through small-cap (and usually Nasdaq-traded) names for energy, precious metals, and mining plays. With most hard commodities consolidating, that run to $200 oil doesn’t look like it’s happening next week, and the magic $8 stocks have lost some luster. Silver did rise on Wednesday, gold did not. Bonds, which had slipped to see the 10-year note’s yield close above 3.5% in three of the past four sessions, gained some ground to push the yield down to 3.47%.
  • After the closing bell, more from the week that is tech storage: LSI Logic (NYSE:LSI) agreed to sell its external storage systems business to NetApp (NASDAQ:NTAP) for $480 million; Human Genome (NASDAQ:HGSI) said the FDA approved its Benlysta lupus drug.
  • On Thursday, the economic data flow brings you the weekly jobless claims, the January trade balance report and the January report on the Treasury budget. A few more C-list earnings reports will trickle out before and after the bell.

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