The credit downgrade for the U.S. made last trading week quite volatile. The
major stock indices experienced significant drops but consistency returned last
Thursday and the primary composites rebounded and recovered most losses. This
was somewhat surprising and a correction was inevitable. The correction has
surfaced today as the primary composites post drops across the board. The DJIA,
NAsdaq and S&P 500 moved in negative territory for the majority of the day. A
significant drop was observed just after opening bell and then stocks struggled
to find break-even for the day. Then, more bad news piled on via Eurozone
markets. The German economy revealed a significantly poor second quarter.
European, as well as Asian stocks, finished the session mixed. Investors were
hoping to hear more positive news stemming from the meeting that included French
President Nicolas Sarkozy and German Chancellor Angela Merkel. The meeting
focused on the Eurozone financial problems and investors were hoping for some
significant stimulus to be the end result. Steps to address the financial issues
were promised but significant stimulus was not mentioned. The negative sentiment
carried over into the U.S. market place and index trend lines dropped lower.
Housing sector data for July was weak in the U.S. and this news also put a
damper on the day. Just prior to official close in the U.S., it appears that the
major indices will finish in the red. Gold moved higher this day and the dollar
strengthened. Prior to close, the DJIA was red by .74 percent at 11,397.42. The
Nasdaq was red by 1.46 percent at 2,517.92 and the S&P 500 was red by 1.09
percent at 1,191.40. Frank Matto
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