Top 3 Reasons Markets were Down and Oil Shot the Moon

Markets closed down on Wall Street: DJI -0.24% SP500 -0.4% Nasdaq -0.56% Gold +1.15% Oil +2.57%.

Markets felt like they spent all day waiting for news from Washington about the budget talks. Stocks opened up a tad and just faded the remainder of the day. Gold (NYSE:GLD) and Silver (NYSE:SLV) closed at new record highs of $1,474.10 and $40.61 respectively. (See “Gold Is Gleaming Brighter On the Breakout“)

Today’s markets were down because:

1) Oil (NYSE:USO) is stepping on the jugular of risk. Did you buy Oil (NYSE:USO) on the dip? Wow! Feels like 2008 again. The weak dollar (NYSE:UDN) helped out today. Don’t Miss Oil ETFS: The Top 10 Exchange Traded Funds for Your Oil Investing List.

2) Airlines and Autos skidded. If a company heavily relies on oil or gas as an input cost, investors threw it to the wolves. Today’s short sellers took aim at airline stocks such as AMR Corporation (NYSE:AMR) down over 4.4%, Delta Air Lines (NYSE:DAL) down almost 4%, United Continental (NYSE:UAL) down 5.7%, JetBlue (NASDAQ:JBLU) down 4.25%, US Airways (NYSE:LCC) down 3.6%, Alaska Air (NYSE:ALK) down 4.4%, while discount airlines Southwest Airlines (NYSE:LUV) and AirTran Holdings (NYSE:AAI) were down only ~ 1%.

3) Ups and Downs. The self-proclaimed “family company” Johnson&Johnson (NYSE:JNJ) will pay a $70 million fine after admitting to bribery. On the other end of the legal spectrum, the U.S. Justice Department said Google (NASDAQ:GOOG) may move forward with the $700 million purchase of flight-data company ITA Software Inc.; however, Google must comply with several requests such as continued licensing to online airfare-search sites for five years, continued research and development of software at levels that are similar to ITA’s investments in recent years, and more.

Next week is earnings! Don’t Miss: Alcoa Earnings Preview: Your Cheat Sheet to 5 Metrics You Must Know.

Now that you’re in the know, enjoy your Federal Government-free weekend!