Daily Market Commentary for August 10, 2011
Volatility was on the front burner for traders as markets continued sell off mode. (read more at Millennium-Traders.Com) http://www.millennium-traders.com/news/newscommentary.aspx
Into early morning trading the Dow Jones Industrial Average was lower by over 400 points. The Nasdaq was down over 79 points and S&P lower by 40 points in early morning trading as well. Across the board, all sectors were affected by the downdraft felt on Wall Street. The U.S. dollar rose against the euro as worries about European sovereign debt expanded to France. Early on in the day, the U.S. dollar index, which measures the greenbackâ€™s performance against a basket of six currencies, turned higher compared to late day Tuesday. The euro turned lower as the cost to insure French debt against default increased. The dollar remained lower against the Japanese yen as U.S. Treasury yields extended losses a day after the Federal Reserve pledged to keep interest rates on hold for at least two years. The dollar hosted a gain on the Swiss franc after the Swiss National Bank said it will take additional measures to curb the strength of the franc.
Across the pond, French bank stocks fell heavily amidst fears that they too, could lose their AAA credit rating. The cost of insuring French debt against default has risen to a fresh high. French President Nicolas Sarkozy held an unscheduled meeting with government ministers and the governor of the Bank of France to discuss the economic and financial situation. The British pound extended its losses after Bank of England trimmed its forecast for growth and inflation and fell further as the euro and U.S. stock markets turned further south.
CME Group reported early on in the day that its single-day volume reached an all-time high on Tuesday, with 25,734,651 contracts traded across all asset classes. Their previous peak of 25,282,704 contracts was struck on May 6, 2010 which was the day of a rapid, deep drop in stocks known as the 'flash crash'. CME noted that Tuesday marked all-time highs for gold futures and options contracts, along with contracts for Australian dollar futures and options.
Economic data from Commerce Department - Inventories at U.S. wholesalers rose 0.6% in June, compared with a revised 1.7% in May and sales of wholesalers also rose 0.6% during June, while the inventory-to-sales ratio was flat at 1.16.
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