Markets closed up on Wall Street today: Dow +1.25%, S&P +1.01%, Nasdaq +1.21%, Oil +0.31%, Gold -0.66%.
On the commodities front, Oil (NYSE:USO) gains slowed, up only 0.31% today after gaining 2.21% yesterday, settling at $95.06. Precious metals took a turn today, with Gold (NYSE:GLD) dropping to 1,500.60, while Silver (NYSE:SLV) dropped 0.26% to $34.68.
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Today’s markets were up for the fourth day in a row because:
1) Greece passes austerity legislation. Yesterday they voted on the austerity measures. Today they implemented them into law. It’s all happening just as everyone had hoped. Now all that’s left is the almost certain approval of a fifth tranche of aid from the EU. Markets are likely to stay high as long as investor confidence is bolstered by consistently positive reports coming out of Greece, but once they’ve received their aid, it will still be a long road to recovery, and markets will have to rely on actual economic progress rather than the avoidance of catastrophe if they are going to continue to grow.
2) Chicago Purchasing Managers Index. Not only did the Chicago PMI increase in June, but it increased more than expected, up to 61.1 last month, over 7 points above the expected 54 rating. Prices paid were lower than they have been since November of last year, thanks in large part to the drop off in oil prices last week that lowered the month’s average.
3) Initial jobless claims. This isn’t a reason markets are up. Actually, it’s a reason they should be down, and a great example of how blinded people have become to the current economic climate in the U.S., which hasn’t been improving as much as it should, or as much as one would think considering the Nasdaq and S&P have almost completely erased losses this quarter and the Dow actually made gains. Initial jobless claims last week were 428,000, down 1,000 from the week before but still up 8,000 from two weeks before. And the employment section of the Chicago PMI was down to its lowest level since December of last year. Whenever the U.S. economy makes small gains, they are largely negated by losses in other sectors.
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