Wednesday, May 26 SUMMARY
Upbeat economic data from the Commerce Department rallied the markets early in the session. First, the government said new-home sales skyrocketed nearly 15% in April, rallying to the loftiest level in nearly a year as buyers rushed to capitalize on an expiring tax credit. In addition, Uncle Sam announced that new orders for durable goods rose by much more than expected last month, soaring to their highest level in 18 months. Then the bears battled back in afternoon trading, with some media reports attributing the about-face to China’s hesitation to buy more European debt. Against this backdrop, the major market indexes extended their recent pattern of eleventh-hour volatility, with the Dow Jones Industrial Average (DJIA) breaching key psychological support by the close.
The Dow Jones Industrial Average (DJIA – 9,974.45) gave up a triple-digit lead in the final hour of trading, closing with a loss of 69.3 points, or 0.7%. Thanks to today’s late-session turnaround, the blue-chip barometer finished the session under the psychologically critical 10,000 level for only the second time since Nov. 4, 2009.
The S&P 500 Index (SPX – 1,067.95) also encountered late selling pressure, giving up 6.1 points, or 0.6%, by the close. Finally, the Nasdaq Composite (COMP – 2,195.88) followed suit and closed lower in the final minutes, surrendering 15.1 points, or 0.7%, to settle under the 2,200 level for the first time since mid-February.
Crude oil futures rebounded today, after the Energy Information Administration (EIA) said domestic demand for petroleum products over the past four weeks is up nearly 7% from year-ago levels. The figures seemed to negate the EIA data showing crude stockpiles increased by more than expected last week, with inventories advancing for 16 of the past 17 weeks. Against this backdrop, July-dated crude futures added $2.63, or 3.9%, to settle at $71.45 per barrel – just under the session high.
Meanwhile, gold futures finished higher for the third consecutive session today, despite a strengthening greenback. By the close, gold for June delivery gained $15.40, or 1.3%, to end at $1,213.40 an ounce.
