Despite a day that by all appearances offered up more than its fair share of global uncertainty – higher oil prices, continued turmoil in Libya, an explosion in Israel, and a watchful eye on Japan – bulls were able to bid stocks to a positive finish on Wednesday.
Of course, “positive” is a relative thing, and the modest push higher in equities had nothing on the runup in gold and silver that was sparked by that same unrest. Gold neared an all-time high before dropping back to only $1,438 an ounce (still a 0.7% gain), while silver surged to another 30-ish year high at $37.29.
That meant a pretty huge day for any stock, be it a Pink Sheet or New York Stock Exchange issue, that had “gold” or “silver” in its name – or “mining,” for that matter. Witness, for example, the jump to 51 cents from 36 cents in shares of American Silver (PINK:ASLM), a company we really know nothing about.
Shareholders in more reputable names like Hecla Mining (NYSE:HL) and Pan American Silver (NASDAQ:PAAS) had to be content with moves higher of 6.7% and 5.6%, respectively.
For the broader market, the Dow Jones Industrial Average gained 67 points to 12,086, the Nasdaq rose 14 points to 2698 and the S&P 500 tacked on 4 points to 1298.
But let us reiterate: the move higher in stocks on Wednesday wasn’t all that.
Rather, energy names once again outperformed as they have since the 2011 peak now nearly five weeks ago, while gold and silver climbed back to or near highs that don’t exactly speak to a huge amount of confidence in global markets.
What’s more, other factors suggest Wednesday’s rally was a little on the thin side. For one thing, the rally was barely even that, as stocks spent the first half of the session in the red. It wasn’t until crude oil began to retreat from above $106 a barrel that stocks were able to mount a move into positive territory.
The move itself held but with a final whimper, which resulted in a not insignificant failure of the S&P 500 to close back above 1300. All told, only 53% of NYSE issues closed higher.
With late news on Wednesday of a possible government shakeup to come in Portugal, the notion of three ongoing crises on three continents doesn’t seem to be a positive backdrop for stocks in the near term.
