US stocks fall, although late buying limits the losses, as the dollar strengthens and chip stocks drag down tech shares after BofA-Merrill downgrades a number of chip makers, and some Treasury investors actually pay the government to hold their money.
DJIA loses 94 (0.9%) to 10332, S&P 500 falls 15 (1.3%) to 1095, Nasdaq Comp loses 36 (1.7%) to 2157. Treasurys rally, with some T-bill rates briefly turning negative. Crude drops, but gold hits a fresh closing high at $1,141.40.
It’s interesting to note that the S&P 500, after closing around 1109-1110 for three straight days, which is roughly the 50% retracement, has now fallen sharply. Getting over that hump — or not — will be a big marker for the bulls and technicians.
Jobless claims are flat, and continuing claims fall, but applications for extended emergency benefits are rising; that means folks are having a hard time finding jobs. Speaking of, AOL’s cutting a third of its staff. Philly Fed report shows some signs of strength.
Tech is the big loser today, after Merrill-BofA downgraded eight chip companies. The Philly Chip Index dropped 3.4%, and Intel lost 4.1%, and AMD dropped 3.7%.
That Treasury rally, especially the short end, should get your attention. The long end, 10-year and 30-year bonds, was essentially flat, but the short end, but yields on the one- and three-month T-bills, actually turned negative (although it seems they’re just in positive territory lately.)
“Treasury prices powered forward again Thursday as investors continued to position themselves for a long period of low interest rates and loaded up on the safest possible securities heading into year-end,” Newswires Deborah Blumberg wrote.
“The last time Bill yields turned negative (in essence investors paying the Government to hold their money for them) was in the days after the Lehman bankruptcy, when the entire world was about to blow up,” Tyler Durden writes at Zero Hedge. Now, the folks over at Zero Hedge are a jumpy lot, but it’s can’t be a very good sign to have investors paying the Fed to hold their money.