The New York Stock Exchange retreated for the second consecutive day after surging for the past week. After good news on the US economy in the past 10 days the market began to worry about economic fundamentals and soft housing sales data.
Jeffrey Saut told Bloomberg people did not like to invest when the market becomes so high. Saut is the chief investment strategist at Raymond James & Associates in St Petersburg, Florida, overseeing more than $300 billion in investments. However, he softened his view by adding the market remains strong.
“I don’t think you should get bearish. Yet the market’s energy seems to be used up after the strong rally.”
The S&P500 Index was down 0.19%, or 2.63 points, to 1402.89. The Dow Jones Industrial Average also finished down 0.35% to 13124.60.
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The NASDAQ Index was flat at 4.17 points up to 3074.15.
The West Texas Intermediate (WTI) oil price was up 0.81% to $US106.93 a barrel overnight.
Gold was up 0.21% to be trading at $US1650.50 an ounce.
The Australian dollar was down slightly overnight, buying $US1.0459 at 8.15am AEST.
European stocks fell more than 1% overnight; the biggest retreat for weeks after more bad news from China put a dampener on last week’s rally. Car makers BMW, Volkswagen and Daimler led the retreat on news China’s demand for new cars are shrinking.
The London FTSE 100 closed 0.01% up to 5891.95.
The German DAX rose 0.23% or 16.38 points to 7071.32.
The European Stoxx50 index was down 0.35% or 9.03 points to 2567.58.
In London an overnight winner was the UK’s third biggest supermarket chain, J Sainsbury (SBRY: LN) which rose 4.52% to 319GB pence after earnings growth. The London-based company operates supermarkets, convenience stores, an internet-based grocery delivery service, and Sainsbury Bank in the United Kingdom.
United States Federal Reserve chairman Ben Bernanke testified overnight to a congressional panel on oversight and government reform that Europe “remains difficult” and must further strengthen its banks.
“Full resolution of the crisis will require a further strengthening of the European banking system,” Bernanke says.