Is market just tired, or is it something worse?
As gold and silver soar, the Dow and S&P 500 fall back from their new highs. Apple fuels the Nasdaq. Here are six reasons the market couldn't add to Wednesday's gains.
It happened Thursday.
Stocks mostly fell back. Crude oil (-CL), but gold (-GC) and silver (-SI) soared on the assumption that the dollar will fall after the Federal Reserve's Wednesday decision not to taper its bond buying.
Interest rates were up slightly. The dollar was mixed.
Color it tired. Color it a touch worrisome, because there's nothing more bullish for investors than a big rally after a rally that pushes the market to new highs.
The Dow Jones industrials ($INDU) dropped back 40 points to 15,637. The Standard & Poor's 500 Index ($INX) slipped 3 points to 1,722. The Nasdaq Composite Index ($COMPX), however, rose 6 points to 3,789.
Here are six things to know about the market after Thursday:
The love of all things Boeing continues
Aerospace giant Boeing (BA) pushed higher, ending up 64 cents to $119.04. It hit an all-time high of $120.38. As Boeing hit a new high, so did United Technologies (UTX). It reached $112.46 before falling back to $112, up 99 cents. The reason is that investors believe the 787 Dreamliner will be a big hit, especially the stretched version that had its first flight on Wednesday. But even as Boeing and United Technologies gained, only nine Dow stocks were higher.
Apple continues to influence the Nasdaq and Nasdaq-100 indexes heavily
Thursday was the one-year anniversary of Apple's (AAPL) peak close of $702.10. Despite the flood of negative analyses about Apple the company, the iPhone and whatever else, the stock jumped $7.62 to $472.30. Because of Apple's $429-billion market capitalization, that gain was good enough to contribute 6.4 points to the Nasdaq-100 Index ($NDX) -- slightly more than the 6.3-point gain the index itself enjoyed. Apple is down 32.7% from that year-ago peak. It is, however, up 22.6% from its bottom on April 19.
Stocks are close to being overbought
The Nasdaq is trading at 13.2% over its 200-day moving average. Its relative-strength index, a measure of momentum, is at 71. Above 70 is a signal a market is toppy. The Dow's RSI is nearly 71. The S&P 500's is 70.2. Overbought does not mean in danger of crashing, however. The averages are also trading above their 50-day moving averages, a signal of investor confidence.
Interest rates barely moved -- but may yet
The 10-year Treasury yield was 2.748% on Thursday, up from Wednesday's 2.708% and down from nearly 3% earlier this month. The yield collapsed on Wednesday after the Fed decided not to taper. But investors took profits on housing and housing-related stocks amid some skepticism on long rates will remain low.
That's a big reason why Ryland (RYL) dropped $1.14 to $41.64. Whirlpool (WHR) was off 10 cents to $149.71.
A criticism of rates as we know them is this from money manager Ken Fisher: The Fed should let longer-term rates rise because that will encourage more bank lending. Fisher might not say this exactly, but he might be thinking it, too: Higher rates means higher profit, and banks would be able to grow earnings without having to shed so many staff.
Gold and precious metals soars
In New York trading, gold jumped $61.70, or 4.7% to $1,369.30 an ounce. That was the biggest one-day gain since Nov. 2, 2009, when gold jumped $113.70 to $1,153.40 an ounce. The gain was the sixth largest since futures trading began in 1980. Why? The dollar fell on Wednesday after the Federal Reserve announcement and moved little on Thursday. And there's chatter a result of the Fed decision will be more inflation. Under that scenario, gold re-assumes its traditional role as an inflation hedge.
Crude oil falls in New York and London
Light sweet crude for November delivery settled at $105.86 a barrel, down $1.42. Brent crude was trading at $108.77, down $1.83. The reflects the markets perception that tensions over Syria are winding down. The national average pump price of gasoline was $3.494 a gallon, according to AAA's Daily Fuel Gauge Report, down slightly from Wednesday. The decline was 17th in a row. Gasoline prices are coming down because refiners are switching from summer blends to winter blends. And people drive less starting in the fall. Energy stocks were mostly lower. Exxon Mobil (XOM) dropped 30 cents to $89.28.
More from Top Stocks
yes - it's something worse ... marc faber calls it "QE INFINITY" as the Fed is running scared and boxed into a corner.
yellen? she'll make bernanke look like a piker when it come to printing money and turning to negative real interest rates. these Fed bankers are actually former professors and academics who have turned into money-printing zombies ...
Is the stock market tired? You say that now after just one day of trading? I wonder if folks that write these articles are just trying to be the next famed soothsayer of the exact Day, the next Epic Bear Market begins. It will begin when it does, no need to be the one that picks any given date.
Rick Santelli, when he's not spilling his political bias, he and I tend to agree on the FEDS actions. I think it's safe to state the he and I both believe that eventually the FEDS will lose control of Interest Rates and thus lose control of their number one objective, pump priming the Stock Markets. Once that happens, and no I have no idea when, all heck will break loose. And it will be Epic, for all the wrong reasons.
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The idea of US crude being a shelter from turmoil abroad may not be as far fetched as it seems.
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