Stocks Shake Off Early Declines, Finish Flat (SPY, QQQQ, GLD, USO, TLT, UUP)
Stocks opened significantly lower this morning after second quarter GDP fell more than had been expected. GDP rose 2.4% versus consensus estimates which called for a rise of 2.5%. At one point the Dow Jones Industrial Average was down more than triple digits.
After better than expected Chicago PMI and University of Michigan Consumer Sentiment numbers, however, stocks rallied all the way back to positive, before giving back some gains into the afternoon. Another late day move pushed the indices back into the green but selling in the final couple of minutes led to a flat close.
On the day, the Dow Jones Industrial Average closed 1.22 points lower at 10,466. The widely watched blue-chip index traded in a range between 10,347 and 10,507. The Dow rose more than 7% in July.
The SPDR S&P 500 ETF (NYSE: SPY) finished up Friday's session with a 0.02% loss at $110.27. Volume was once again on the light side with around 213 million SPY shares trading hands versus a 3-month daily average of nearly 283 million. The July rally has been accompanied by abysmal volume as many market participants seem to still have two feet on the sidelines.
The PowerShares QQQ Trust ETF (NASDAQ: QQQQ), which tracks the performance of the Nasdaq 100, closed 0.22% higher at $45.84. The broader Nasdaq market gained 0.13%, or 3.01 points, to close at 2,254.70. The quad Q's are holding onto tiny gains for 2010, up 0.13% year-to-date.
Gold had one of its strongest days in awhile. COMEX gold futures closed $13 higher at around $1,181.60. The SPDR Gold Trust ETF (NYSE: GLD) added 1.05% to $115.49. In July, the GLD fell more than 5% from its all-time highs which were hit in June.
It was a volatile trading session in crude oil, with big morning losses being reversed throughout the day. When the dust settled, NYMEX crude futures closed 0.65% higher at $78.87. The day's low was all the way down at $76.83. The United States Oil Fund ETF (NYSE: USO) jumped 0.80% to finish at $35.34.
Treasuries rallied very hard today, despite the fact that risk assets such as stocks, copper, and oil also moved higher. This seems noteworthy. The bond market is saying "look out ahead," but other markets do not seem to be heeding the warning.
The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) jumped 1.56% to $100.48. Notably, volume was heavier than normal. The yield on the 10-Year Treasury note fell nearly 8 basis points to 2.9052%. Seeing a flat stock market on a day when bonds moved violently higher could suggest the stock market is mis-pricing risk as we move into August. A sell-off next week would not be surprising.
The U.S. Dollar was more or less flat on the day. The PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the dollar against a basket of foreign currencies, gained 0.04% to $23.74. The U.S. Dollar Index itself, however, lost 0.12% to 58.73. The Dollar Index gapped higher before falling throughout the day. The closely watched EUR/USD pair is currently trading at $1.305.
