Market Forces Push Down on Prices
Profit-taking seems to be the rule this week.
Bryce Knorr
Published: Apr 8, 2009
After rallying almost 25% off last months lows, the stock market is again starting to wonder which end is up. Following last week's heavy flow of news, capped by another poor unemployment report, the market may try to take a breather in this holiday-shortened week.
Indeed, a lot of markets appeared to suffer profit taking on Monday. Unlike some of the recent trading days, the pain was spread across a variety of risk platforms.
Crude oil, for example, followed stocks lower, when Wall Street failed to hold overnight Asian gains. Stocks appeared hampered by more concerns about banks, and the collapse of a couple of big mergers. Oil, meanwhile, tumbled in sympathy on ideas maybe growth wouldn't be as strong as hope. More and more analysts are putting back a recovery until 2010, talk that can become a self-fulfilling prophesy.
Even some of the the safe havens succumbed to the pressure. Gold continued its freefall, gapping sharply lower and starting to target support at the $850 level. Treasury bonds also broke, raising interest rates, on fears the huge government deficit will increase supplies to the breaking point. There's also concerns the Federal Reserve isn't being aggressive enough in following through with its plans to keep long-term interest rates low by buying Treasuries.
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