Barchart Stock Market Wrap – October 8, 2008

Commentary: Even a coordinated 50 basis point rate cut by global central banks couldn’t provide support for the stock market today.

Overnight weakness in Asian markets (the Japanese Nikkei was down nearly 10%) spilled over to Europe on concerns about tight credit and slowing economic conditions. Before the US markets opened, the Federal Reserve joined by the European Central Bank, the Bank of England, the Swiss National Bank and the Bank of Canada all announced a 50 basis point rate cut.

As a result, the extreme weakness that futures had been pointing to failed to materialize on the US open. Still the market was extremely volatile and swung from triple digits gains to triple digit losses.

The Dow Jones Industrials finished the day down 189 points or a loss of 2% today. The S&P 500 Index lost 11.3 points or 1.1%.

December Comex gold has benefited from this global stock market concern and continued its recent climb to close over the $900 level at $909.50, up $27.50.

It seems a distant memory when crude oil was going up. Today spot November crude oil futures closed at its lowest level this year at $88.32 per barrel. Crude oil was not only punished by concerns of the global economy, but suffered from a surprising rise in crude oil inventories which rose 8.1 million barrels. The most recent four-week usage rates for gasoline are now 5.3% below the same period last year, demonstrating real demand destruction.

Profit-taking in the Dollar Index continued for a second day with the December Dollar Index falling 17.5  points to close at 81.045 today. 

Reports Due Tomorrow:

8:30 am – Department of Labor Initial Claims report for the week of 10/04.

10:00 am – Census Bureau’s Wholesale Inventories for August (expected at +0.4 % versus +1.4% in July).

After the Market Closes – Chevron (CVX) reports earnings (expected at $3.21 up from $1.97 in the year previously).

Market Momentum: There were 749 advancing issues (versus 381 yesterday) on the NYSE, with 2,520 declining issues (versus 2,881 yesterday). On the NASDAQ, there were 796 advancing issues (versus 534 yesterday) with 2,150 declining (versus 2,475 yesterday).

New 52-week Highs: There were 19 issues reaching 52-week highs between the NYSE and NASDAQ

New 52-week Lows: There were 3,226 new 52-week lows on the NYSE and NASDAQ.