It’s a measure of investor apathy this week that Tuesday’s trading volume was barely above the year’s low set Monday amid a blizzard that dumped fresh powder across the East Coast.
New York Stock Exchange volume rose a good 10% on Tuesday, but the number of shares trading hands was still about 40% of its average during the last 10 days.
A tight trading range also continued throughout the session: the Dow Jones Industrial Average tacked on just 20 points on Tuesday (after losing 18 points the day before), while the Nasdaq slipped 0.2% and the S&P 500 could muster only a 1-point gain.
Bulls can point to another mostly winning session, but it’s merely a technicality: any significant gain — or loss — by the market in 2010 seems to have already made itself known. Stocks have traded within a 2% or so range since Dec. 13.
The session began with another selloff having taken place in Asian markets — the Shanghai Composite Index dropped 1.7% — but investors in the U.S. have refused to take the bait. Ironically or not, Chinese stocks have now fallen about 12% in 2010 — roughly the same magnitude of gain posted by U.S. stocks this year.
Other downers in Tuesday’s news flow came via reports on consumer confidence and the Case-Schiller home price index. The confidence index dropped to 52.5, below both expectations of 56.3 and November’s level of 54.3. Those surveyed saying jobs are “plentiful” fell to 3.9 percent from 4.3 percent, while those stating jobs are “hard to get” edged higher to 46.8 percent from 46.3 percent.
However, bullish investors (are there any other kind right now?) seemed to shrug off the data as a one-off, instead choosing to focus on holiday retail sales jumping 5.5% the best performance in five years.
The home price data was a little harder to explain away. Although the information surveyed October, the measure of the top 20 metropolitan areas has now fallen for four straight months, as the magnitude of the fall increases.
The combination of data seemed to help along a selloff in bonds, with the 10-year Treasury yield rising back near 2010 highs at 3.48%. Homebuilders and home construction stocks understandably took a hit: The iShares Dow Jones U.S Home Construction (NYSE:ITB) exchange-traded fund fell 1.2%.
Other than those investors who were short volatility, the 10-year bond, China and the homebuilders, the session’s winners were investors in precious metals, and rare earth and base metals. Silver and gold each found bids again: silver was up 3.6% to $30.31 an ounce, while the yellow metal rose 1.7% to $1,406 an ounce. The SPDR Gold Shares (NYSE:GLD) ETF is up about 21% since early August, and is once again nearing a ceiling that has repelled traders twice already in the past two months.
Silver will easily finish as the champion asset of 2010: the extra-bullish ProShares Ultra Silver (NYSE:AGQ) ETF is up 185% this year.
