Dow Off 45; Gold, Oil Rally Further
Stocks stumbled through a quiet pre-holiday session Tuesday, with most key indexes ending with modest losses.
In commodities markets, oil and gold prices continued their recent rallies. In currency trading, the dollar slid to a new three-year low against the euro.
Trading volume was very light as the New York Stock Exchange and other equity markets closed three hours early, at 10 a.m. PST. Markets will be closed today in observance of Christmas. They will reopen Thursday with regular hours.
Sellers dominated what action there was Tuesday: The Dow industrials fell 45.18 points, or 0.5%, to 8,448.11, while the Nasdaq composite slipped 9.22 points, or 0.7%, to 1,372.47.
Losers outnumbered winners by 16 to 15 on the NYSE and by 17 to 13 on Nasdaq.
The latest economic news wasn’t encouraging, as the government reported that orders to factories for big-ticket goods fell 1.4% in November.
With many retailers reporting weak holiday sales, the decline in durable goods orders raised more questions about the economy’s pace heading into 2003. If activity is slowing, expected corporate earnings gains may not materialize.
Those concerns have left the stock market stalled since mid-November, after rallying from five-year lows in October.
Many investors had been hoping for a year-end rally to pare their losses. The Dow still is down 15.7% this year; the Nasdaq index is down 29.6%.
Worries about the economy drove some investors into Treasury securities Tuesday. The yield on the 10-year T-note fell to 3.94% from 3.97% Monday. The yield has dropped from 4.21% at the end of November.
Likewise, some currency traders are continuing to dump dollars in favor of other currencies. In part, that reflects fears that a war between the United States and Iraq could spur jittery foreign investors to sell U.S. assets, analysts said.
The euro rose to $1.03 on Tuesday in New York, up from $1.026 Monday and the highest closing level in three years.
The Swiss franc hit a four-year high against the dollar.
“Hawkish [U.S.] rhetoric about North Korea gives investors even more excuses to avoid U.S. assets,” Monica Fan, a currency strategist at RBC Capital Markets, told Bloomberg News.
“If there was an attack on North Korea, business confidence would be very shaken,” hurting the economy, she said.
Gold, the traditional safe-haven investment, has benefited in recent weeks at the dollar’s expense. On Tuesday near-term gold futures in New York added $1.70 to $346.80 an ounce, the highest since May 1997. Gold began the year at $279.
In energy markets, oil prices rose for the ninth time in the last 12 trading sessions, lifting February futures in New York to $31.97 a barrel, up 22 cents. The price now is the highest in almost two years.
The oil market was riled Tuesday by speculation that U.S. refiners have dipped into their reserves to compensate for missing barrels from Venezuela, Bloomberg News reported.
A 4-week-old national strike has kept that nation’s refineries shut. Venezuela is the world’s fifth-largest oil exporter and a key U.S. supplier.
“It doesn’t look like this situation is going to be resolved anytime soon,” said Justin Fohsz, a broker at Starsupply Petroleum Inc. in Englewood, N.J.
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Market Roundup, C4-5
