Stocks pull back as rising dollar halts a rally in commodities

OCT 26, 2009
Stocks gave up early gains Monday as a rising dollar stalled a rally in commodities. Oil and other commodities had risen in early trading, pushing up shares of energy and materials companies, but by midmorning those gains were gone as the dollar turned higher against other currencies. Changes in the dollar frequently push commodity prices up or down, since a higher dollar makes oil and other basic materials, which are priced in dollars, more expensive to non-U.S. investors. The Dow Jones industrial average swung in a 200-point range, surrendering an early advance for a loss of about 100 points by late morning. Oil fell $1.16 to $79.34 per barrel on the New York Mercantile Exchange, having given up earlier gains. Technology shares fared somewhat better than other parts of the market after Marvell Technology Group Ltd., which makes chips used in phone networks, raised its fiscal third-quarter revenue forecast. That helped the technology-focused Nasdaq composite index limit its losses. RadioShack Corp.'s third-quarter sales topped expectations, giving a boost to retailers. Richard Ross, global technical strategist at Auerbach Grayson in New York, said the direction of the dollar as well as volatility continues to drive trading. "You're seeing this sort of waltz between the dollar and volatility and stocks," he said. In midday trading, the Dow fell 120.62, or 1.2 percent, to 9,851.56. The index had been up 100 points in early trading. The broader Standard & Poor's 500 index fell 13.29, or 1.2 percent, to 1,066.31, while the Nasdaq fell 17.11, or 0.8 percent, to 2,137.36. More than two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 548.9 million shares compared with 496.4 million shares traded at the same point Friday. The Dow fell 0.2 percent last week, while the S&P 500 index fell 0.7 percent. Bond prices slipped as the government prepared to auction more than $120 billion in debt this week. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.52 percent from 3.49 percent late Friday. The dollar rose against most other major currencies, while gold fell. Traders looked to another busy week of earnings reports. Investors will look for clues about a possible pickup in consumer spending when companies including Kellogg Co., Procter & Gamble Co. and Visa Inc. report earnings. The energy and insurance industries also will be in focus throughout the week with ConocoPhillips and Exxon Mobil Corp. as well as Aetna Inc. and MetLife Inc. scheduled to release quarterly results. Among companies reporting earnings, Marvell rose 33 cents, or 2.3 percent, to $14.91, while RadioShack rose $2.15, or 13.7 percent, to $17.81. The Russell 2000 index of smaller companies fell 5.12, or 0.9 percent, to 595.74.

Latest News

SEC to lose Hester Peirce, deepening a commissioner crisis
SEC to lose Hester Peirce, deepening a commissioner crisis

The "Crypto Mom" departure would leave the SEC commission with just two members and no Democratic commissioners on the panel.

Florida B-D, RIA owner pitches bold long-term plan to sell to advisors
Florida B-D, RIA owner pitches bold long-term plan to sell to advisors

IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.

Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships
Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships

Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management