Dow Closes 9 pts Down

March 4th, 2010  by Katy Loi

Closing Data

	Current	Change	%
Dow Jones	10,396.76	-9.22	-0.1%
NASDAQ	2,280.68	-0.11	-0.0%
S P 500	1,118.79	0.48	0.0%
FTSE 100	5,533.21	49.15	0.9%
Nikkei 225	10,253.14	31.3	0.3%
ASX 200	4,743.40	7.7	0.2%
COMEX Gold - Dec 09	1,143.30	5.9	0.5%
COMEX Silver - Sep 09	17.329	0.265	1.6%
COMEX Copper - Sep 09	343.5	2.35	0.7%
WTI Spot	80.9	1.46	1.8%
AUD-USD	0.9054	0.0016	0.2%
Aluminium	2,108.00	7	0.3%
Copper	7,359.00	24	0.3%
Lead	2,150.00	-1.5	-0.1%
Nickel	21,505.00	135	0.6%
Tin	16,975.00	-105	-0.6%
Zinc	2,197.00	19	0.9%

The Dow closed down 9 points whilst commodities rose as reports showing improvement in the U.S. job market and service industries bolstered investor optimism. Greece announced plans to reduce Europes biggest deficit. Treasuries fell and the dollar weakened. The latest draft proposals to regulate the financial sector, including provisions to stop proprietary trading at banks, pressured financial shares. Big pharmaceutical companies fell after President Barack Obama urged Congress to pass sweeping healthcare reform laws within weeks.

Gold climbed to a six-week high in New York on speculation that escalating sovereign-debt concerns will boost demand for the metal as an alternative to currencies. Greek Prime Minister George Papandreou announced an additional 4.8 billion euros ($US6.6 billion) of deficit cuts as he tries to convince European allies and investors that he can tame the region's biggest budget gap. Gold priced in euros climbed to a record yesterday.  Gold is going to become the currency of choice as people lose faith in fiat currencies, these countries continue to write cheques that they can't cash. There are hopes that the Greek deficit cuts will stem the tide of the declining euro.  Concerns that the austerity measures being taken in Greece may soon have to be undertaken in other European economies and in the UK should lead to continuing safe-haven demand for gold. The metal jumped 24 per cent in 2009 as record-low US interest rates and government spending weighed on the dollar and countries including India and China boosted bullion reserves.

Australian stocks are set to open modestly higher, supported by resource stocks after copper rose to a 7-week high as a weaker dollar made metals cheaper for non-U.S. investors.  SPI futures points to an open up 8 points to 4,758. On an hourly chart, the index has been trading in an uptrend channel since the 25th of February as it finishes on support at 4752 yesterday.  After breaking resistance at 4750 yesterday late in the session on strong momentum, we could see this rally continue over the next few weeks.  A good sign is that the index has closed and held above a long term moving average at 4716, so if we can hold above this level, it would be prudent to enter the market after the necessary dip it has taken over the late January, early February. 

In company news, NAB has joined the other major banks in raising its standard variable mortgage rate by 0.25% to match the RBA’s increase. RIO has been awarded a mining permit to mine nickel at its planned $2.2 billion project on Sulawesi, Indonesia.  MQG is planning to float oil and gas services company Miclyn Express Offshore.

Data to watch tonight in the States is Initial jobless claims for February – consensus is for it to fall to 474k from 496k which may be positive for the market. With energies and commodities being strong, buy writes for oil and resource stocks would be ideal for March expiry. With only 3 weeks to go before expiry, it would be prudent to enter positions soon to reap the most out of time value in the options. 

Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.

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