Markets closed down on Wall Street today: Dow -0.89%, S&P -0.74%, Nasdaq -0.26%, Oil -0.08%, Gold +0.19%.
On the commodities front, Oil (NYSE:USO) fell slightly to $86.38 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) climbing to $1,880.40 an ounce while Silver (NYSE:SLV) fell 1.96% to $42.23 an ounce.
Today’s markets were down because:
1) ISM report. The Institute for Supply Management’s index of non-manufacturing businesses increased to 53.3 in August, up from 52.7 in July. Economists had forecast the gauge would drop in August to 51, heading dangerously close to 50, anything below which signals contraction. The report followed last week’s ISM report, which had manufacturing increasing as well, but that wasn’t enough to give markets a boost today, as the euro-zone debt crisis continued to be a drag on the markets.
2) Switzerland. The Swiss National Bank has set an exchange rate cap on the Swiss franc (NYSE:FXF) in order to discourage investors from looking to the currency as a safe haven. The SNB said it will “no longer tolerate” an exchange rate below 1.20 francs to the euro (NYSE:FXE), and will keep the franc down by buying foreign currencies in unlimited quantities. The news had the franc dropping sharply against both the euro and the dollar (NYSE:UUP) as investors fled from what was one of the few safe-haven currencies left.
3) Banks. With most of the nation’s top banks facing lawsuits and multibillion-dollar settlements, bank stocks were among the day’s worst performers. Bank of America (NYSE:BAC) fell below $7/share today, bringing the stock’s total YTD decline to 48%, while JPMorgan (NYSE:JPM) fell 4.22%, Wells Fargo (NYSE:WFC) fell 1.86%, and Citigroup (NYSE:C) fell 3.38%.