Summary
Given the violent start to the week, the net result was pretty boring. One exception was AAPL, which continued the relentless slide from its peak about seven weeks ago, shedding another 5%. It also broke its 200-day moving average. The question is, will this widely owned stock serve as a leader in taking the broader market down with it? October often exhibits scary stock movements. This year, with the exception of AAPL, it has proven itself fairly mild. However, precious metals did feel the October pain, shedding about 8%, with the first two days of November weighing them down still further.
Review
Monday, stocks in Asia drifted just slightly lower. In Europe, they declined 0.4%. Hurricane Sandy disrupted business on the northern East Coast, keeping U.S. stock markets from opening. Tuesday, stocks in Asia traded flat despite the announcement of further monetary easing by the Bank of Japan. Stocks in Europe climbed about 0.8%, turning around Monday’s loss with a similar net gain. Markets in the U.S. remained closed due to the storm.
Wednesday, Asian stocks closed up 0.4%. In Europe, they dropped 0.5%. On the first day U,S. stocks traded this week, they rose about 0.4% on low to moderate volume. The subdued volume was a bit surprising considering the market had erased two trading days. Facebook fell 3.8% on the first day lesser Facebook employees could dump their worthless shares. Thursday, Asian stocks erased Wednesday’s gains—despite China’s report of its monthly PMI reading rising to 50.2 from 49.8 the previous month. Goofy ADP employment data included big (lowered) “revisions” of previous months. Stocks in Europe shot up 1.2% and in the U.S. over 1% on low moderate volume. This gain again pushed the NASDAQ Composite Index above the 3000 mark. While news reports credited positive economic reports for the gain, another likely factor was the first-trading-day-of-the-month bump.
Stocks in Asia rolled upward Friday, continuing the momentum started in the West, driving the Nikkei above 9000. Across Asia, stocks rose 0.6% as they also did in Europe. Gold broke below the 1700 level as the U.S. dollar strengthened. The U.S. Bureau of Labor Statistics reported little change in the labor picture. U.S. stocks closed down 0.9% correcting the unwarranted gain of the previous day on low moderate volume. The NASDAQ Composite Index again slipped below the 3000 mark, but the Dow Jones Industrial Index managed to hold above the 13,000 and the S&P 500 Index above 1400.
