DIA +.4%, SPY +.3%, QQQQ +.35%
10-Year Treasury +8/32 to 4.04%
Oil -55 cents to $60.73
Dollar, off slightly versus yen and euro
The markets originally opened down, but slowly rallied throughout the trading day to eventually close up. One commentator noted that investors have become somewhat numb to terrorist attacks, and in fact may view these events as a buying opportunity. Several retailers – Target, American Eagle Outfitters and the Gap – reported better than expected 2nd quarter earnings. In addition, retailers reported a 5.5% increase in same-store sales for June, indicating the US consumer was buying heavily. After the bell, Dow member Alcoa reported a 14% earnings increase.
The 10-Year Treasury rose 8/32 to close at 4.04%. Treasuries opened at a 4.00% yield – 9 basis points below where they closed yesterday. However, traders slowly sold off their positions throughout the trading day. This was a classic flight to quality. In times of international emergency, US Treasuries typically rally because investors view these investments as very safe.
Oil lost 55 cents to close at $60.73. The market dropped as much as 3% on concerns the British bombing would have an impact on the oil market similar to 9/11. However, as the market started to digest the facts, traders noted the damage was not as broad as 9/11 and the impact on the oil market would be far lower. Traders are still watching the storm situation in the gulf, which has already been heavy.
The dollar was down slightly versus the euro and the yen. The dollar originally sold-off more versus both currencies, but ended near the unchanged market. Forex traders are waiting for tomorrow’s US employment numbers. As a result, they were unwilling to add or subtract from positions today.
