DIA +.38%, SPY +.07%, QQQQ +.23%
10-Year Treasury -4/32 to 4.16%
Oil -61 cents to $60.01
Dollar +1.2% versus euro and yen
The primary stock specific news today was an analyst upgrade of IBM. Aside from that, stock traders mulled the market as they wait for third quarter earnings. 2nd quarter earnings were up 6.8%, so traders are expecting decent results for the third quarter. On the deficit front, the Bush administration lowered its deficit projection to 333 billion for the year.
The 10-year treasury lost 4.32 to yield of 4.16%. Bond traders are waiting for inflation date released tomorrow and Friday. Import prices came out today, which showed an increase of 1% with oil and a decrease of .4% without. Of other news, the Treasury auctioned 13 billion in 5-year notes today. The indirect bidder percentage – a gauge of foreign central bank participation – dropped to 29.6% from 49.9% last month.
Oil dropped 61 cents to close at $60.01/bbl. Gulf oil production is 85% restored from the closing down last week. However, traders are eyeing another tropical storm on the horizon. The International Energy Association reported a 200,000 bbl/day decline in their world energy projection. In addition, the Department of Energy reported a 3.2 million barrel increase in distillate inventories in the weekly petroleum report. The decline of 3.9 million barrels in oil inventories was expected because of last weeks tropical storms in the gulf.
The dollar rose 1.2% versus the euro and the yen. The US trade deficit shrunk 2.7% last month to 55 billion. Traders were concerned about an increase in this number due to China’s report earlier in the week of record exports. Several commentators noted that most of the decline was due to a drop in oil prices, indicating the drop in the trade deficit may be temporary.