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Current Futures: Dow -89.00, S&P -9.20, NASDAQ -8.25
U.S. markets are heading lower for a second consecutive day, as almost every sector declined and investors consider the current market valuation as expensive.
During the mid-session, the S&P 500 broke below the low set on Monday, near the 915.00 area. Moreover, around the same area, the S&P broke below the support trend-line that held the pair since the beginning of April, something that suggests that the market may continue its downside move, TheLFB-Forex.com Trade Team notes.
Throughout Tuesday’s trading session, every sector decreased with the exception of the healthcare companies. Commodity stock and homebuilders advanced shortly after the opening bell, after a report showed that U.S. building permits improved slightly in May to 0.52M. Despite the market’s optimism, TheLFB-Forex.com Trade Team believes that the market’s reaction to the news release might have been a little premature, since the number of building permits released in May 2009 is just a third of the average number released during the 2003-2006 period. Consequently, the two sectors, homebuilders and commodity stocks are now trading almost 2% lower.
Producer price index rose 0.2% in May, less than expected. Despite the month-over-month gain, the PPI index is down 5% from one year earlier, making it the biggest decline since 1949, but still, the core PPI is up 3% from one year ago. A different release showed that the capacity utilization rate for the eleventh consecutive month in May reached a record low of 68.3%. At the same time, industrial production fell for the seventh consecutive month in May, reaching the largest year-over-year decline since 1946, of 13.4%. TheLFB-Forex.com Trade Team notes that the two releases do not point to an economic rebound.
The Dow Jones Index fell 82.82 points (0.96%) to 8,529.30, while the S&P 500 declined 10.01 points (1.08%) to 913.71.
Crude oil for July delivery was recently trading at $70.55 per barrel, higher by $0.10.
Gold for July delivery was recently trading higher by $8.30 to $935.80.
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