The U.S. dollar was strong again on Wednesday, for the fourth consecutive day. But stocks closed higher after fighting a weak opening, which took the entire session to overcome.
Despite a higher close, the Dow Industrials were under pressure for the entire session due to another big decline in The Boeing Company (NYSE: BA). Delays have put the delivery of the 787 Dreamliner three years behind schedule, and the news that drew more sellers of the stock was an emergency landing of a test 787 following a report of smoke in the cabin.
The dollar’s strength was attributed to continuing concerns over the debt issues of Ireland and Greece. And helping both the greenback and stocks was a report that U.S. workers filing new jobless claims fell by a greater-than-expected 24,000 to 435,000, which is the lowest reading in four months. Additionally, the trade deficit for September was slightly less than expected.
In corporate news, Campbell Soup Company (NYSE: CPB) fell 3.3% after a deep cut in its full-year earnings forecast. Ford Motor Company (NYSE: F) jumped 56 cents after General Motors said it earned $2 billion in Q3 on a revenue increase of 20%. And Research In Motion Limited (NASDAQ: RIMM) gained on the announcement of a new tablet.
Yields on 10-year Treasury notes were lower by 6 basis points, taking the yield to 2.66%.
At the close, the Dow Jones Industrial Average gained 10 points to 11,357, the S&P 500 rose 5 points to 1,218, and the Nasdaq gained 16 points at 2,579.
The NYSE traded 1.1 billion shares with advancers over decliners by 1.6-to-1. The Nasdaq crossed 594 million shares with advancers ahead by 2-to-1.
Crude oil for December delivery rose $1.09 to $87.89 a barrel, and the Energy Select Sector SPDR (NASDAQ: XLE) closed at $63.18, up 80 cents. December gold fell $10.80 to $1,399.30 an ounce, and the PHLX Gold/Silver Sector Index (NASDAQ: XAU) rose 5.23 points to 219.60.
What the Markets Are Saying
Stocks recovered from early morning losses and closed with a plus for the day. But the significance of the reversal is that all indices had successfully tested the support zones and survived.
Sentiment numbers rose to the highest levels since April. The Investor Intelligence (II) Advisors Survey showed bullish advisors at about 4% less than April, but 7% more than last week’s number. The Association of Individual Investors (AAII) numbers will come out late today, and I’ll report those numbers in tomorrow’s Daily Market Outlook.
Despite the high levels of uncertainty concerning the European debt problem, the upcoming G-20 meeting, and Chinese currency threats, investors seem relatively unperturbed by it all and are confident of rising stock prices. The CBOE Volatility Index (VIX) fell 0.63 yesterday to 18.47, which is one of the lowest readings of the year.
Silver was hit hard late on Tuesday, and was lower again yesterday following new margin requirements by the Comex. The money needed to maintain a contract of the metal was increased to $6,500 from $5,000, effective on Wednesday. This created a storm of liquidations since the hike came just as investors were rolling expiring contracts to the March delivery, so some decided to hold the cash rather than reinvest, according to the Wall Street Journal. The new requirements should not interrupt the long-term trend of silver, and the pullback in ETFs was partially overcome yesterday, with many recovering about half of Tuesday’s losses.
Stay focused on yesterday’s buy list since the trend is still pointed up. TICC Capital Corp. (NASDAQ: TICC) hit our buy under price of $10.50 yesterday before reversing and closing at $10.97. Buy it now.
For another stock to buy now, see the Trade of the Day.
Today’s Trading Landscape
All bond markets are closed to observe Veterans’ Day.
To see a list of the companies reporting earnings today, click here.
To see what economic reports are due out this week, click here.
If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net.
