Sam Collins

Be Prepared to Put Cash to Work

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The economy took center stage again yesterday, with two important reports: jobless claims and existing home sales. Stocks opened higher on news that the latest jobless claims number fell to its lowest level in two months. But when data was published that showed a drop in existing home sales, stocks fell to their lowest levels in more than a week. 

Financial stocks took a big hit, off 1.8%. And REITs were among the worst performers as profit-taking took back the gains made early this week. 

However, the U.S. dollar staged one of the strongest rallies this year -- advancing the Dollar Index more than 1%. And that meant that commodities, especially gold and oil, took a pounding. Gold fell 1.53% and crude oil was off 4.4%.

At the close, the Dow Jones Industrial Average (DJI) was off 41 points to 9,707, the S&P 500 (SPX) fell 10 points to 1,051, and the Nasdaq (NASD) was down 24 points to 2,108.

Volume on the NYSE totaled 1.4 billion shares, while 759 million shares traded on the Nasdaq, with decliners ahead of advancers by more than 3-to-1 on both exchanges.  

Crude oil for November delivery fell to a nine-week low, closing at $65.89 a barrel, off $3.62. The Energy Select Sector SPDR (XLE) was off 78 cents at $53.63. 

December gold fell $15.50 to $998.90. It was the first time in two weeks that gold closed under $1,000 an ounce. The PHLX Gold/Silver Index (XAU) closed at $160.84, down $3.75. But the trend is still up for gold, and the recent profit-taking will probably be contained above $150 on the XAU.

What the Markets Are Saying

Even though volume on the NYSE picked up slightly on yesterday's selling and breadth was at a negative 3-to-1, steady buying in the blue chips kept the pullback in check.