U.S. stocks pared steep losses Thursday buoyed by a report that Greece had reached an austerity plan with European authorities. The Dow Jones Industrial Average fell 59.67 points to close at 12,050.00, after touching an intraday low of 11,874.94. The S&P 500 Index lost 3.64 points to close at 1,283.50, while the Nasdaq Composite Index ended the day positive, finishing the day up 17.56 points to close at 2,686.75, after sinking as low as 2,627.47 earlier. Initial jobless claims rose by 9,000 to a seasonally adjusted 429,000 in the week ended June 18, the Labour Department said Thursday. The prior week’s figure was revised higher to 420,000 from an originally reported 414,000.
Near the end of the trading day, stocks received a lift from a Reuters report that Greece received approval from the European Union and International Monetary Fund inspectors for its latest five-year austerity plan. European markets were broadly lower after a weak reading in a survey of euro-zone purchasing managers renewed concerns of an economic slowdown. Trichet warned that fallout for the banking sector from euro-zone governments’ public finances was the region’s “most serious threat to financial stability.
Crude for August delivery fell $4.39 to settle at $91.02 a barrel. Even though lower energy prices are a positive for energy-crunched consumers, market participants said oil’s sharp turn downward required more big investors to dump riskier assets to cover their surprise losses. We were surprised how much the market slumped on the oil news earlier, given that a drop in price should be perceived as a positive for equities. The dollar gained versus the euro and the yen.
Today’s Important Economic Announcements (GMT)
8:00 AM EUR German Ifo Business Climate
9:30 AM GBP BOE Gov King Speaks
9:00 AM EUR Industrial New Orders m/m
12:30 PM USD Core Durable Goods Orders m/m
Crude Oil
Crude-oil futures edged back up in electronic trading Friday, after plunging late Thursday on the International Energy Agency’s (IEA) release of oil reserves. Benchmark crude for August delivery gained 65 cents, or 0.7%, to $91.69 a barrel on the New York Mercantile Exchange during Asian trading hours.
Oil suffered a 4.6% drop in the North American session, after the IEA said it would release 60 million barrels of oil into world markets in the coming month to counter lost production in Libya. Further weakness is expected in the next 24 hours.
Stop Loss: 95.50
Take Profit: 89.70
GBP/USD
Data for the British pound this past session offered up a mixed picture. The CBI retail sales report for June reported the first net decline from the indicator in a year while mortgage approvals offered a modest uptick (to 30,509) without meaningfully altering the troubled housing sector’s course. Yet, calendar watching is the true fundamental guide. Looking at overnight UK Libor rates, we can see where the bear trend originates. The pair’s downward movement reached as low as 1.5938. Further fall is still possible after a minor consolidation.
Stop Loss: 1.6180
Take Profit: 1.5929
USD/JPY
If everything in the market were simple, Thursday would have ended with a strong rally across the board for the Japanese yen. However, that was not the case. The US dollar, Japanese yen and New Zealand dollar all posted gains against the yen; while the rest of the majors held to relatively small losses. Risk aversion was in control Thursday; but the brand of ‘safe haven’ is becoming more important. The pair is forming a sideways consolidation in a range between 79.58 and 82.22. Rise to 81.50 area to reach next cycle top on hourly chart is expected in next several days. We are bullish with caution.
Stop Loss: 80.12
Take Profit: 80.88
Published by www.SolidityBrokers.com
