Top 3 Reasons Markets were Down on Goldman’s Oil Scare
Markets closed down on Wall Street: DJI -0.2% SP500 -0.08% Nasdaq -0.46% Gold 0.61% Oil 1.86%.
Markets started in the green, sold off into the red, made a honorable attempt to rally end of day, but sold off again into the bell. On the commodities front, Oil (NYSE:USO) was volatile in the afternoon, but managed to rally to $99.52 on the day. Gold (NYSE:GLD) held $1,500 again as debt scares haunted investors, and Silver (NYSE:SLV) got back to it’s old ways adding over 4%.
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Today’s markets were down because:
1) Market police continue to blow whistles. Yesterday Italy (NYSE:EWI) took a credit outlook rating cut from Standard & Poor’s (NYSE:MHP), and today Moody’s (NYSE:MCO) the streak alive by threatening to take the downgrade sword to the UK banks. As if that wasn’t enough for bankers to skip dessert, New York Attorney General Eric Schneiderman got his investigation on by expanding his mortgage fraud probe to the bond insurers: Ambac Financial Group (PINK:ABKFQ), MBIA Inc. (NYSE:MBI), Syncora Holdings Ltd. (PINK:SYCRF), and Assured Guaranty Ltd. (NYSE:AGO).
2) Oil rallied on Goldman’s flip-flop. In April, Goldman Sachs (NYSE:GS) screamed “Sell Oil Now!” Today they went Chinatown on us and shouted “Buy Oil Now!” Regardless, on days when Oil (NYSE:USO) rises strongly, the econ bears take the stage warning of higher gas prices and weaker consumer sales — a good reason to sell stocks. But don’t tell them about airline woes because canceled flights from the volcano are sure to weigh on fuel demand in the near future.
3) IPOs were hot, the NASDAQ was not. Shorts got their faces melted off in LinkedIn (NYSE:LNKD) at 2PM, while white hot Russian search engine Yandex (NASDAQ:YNDX) popped 55% at its initial public offering and Glencore (LON:GLEN) gave underwriters a reason to cheer.
Bonus: Results are in. Here’s Your Cheat Sheet to this Quarter’s Dow 30 Earnings.
Now that you’re in the know, let’s see whether the Chicago Bulls can take one more game from the Miami Heat!