Thursday, July 24, 2008
Oil Down.....Markets Up
The markets were up again Wednesday on further decline in oil prices. The Dow added 29.88 points to close the session at 11,632.38. The SPX gained 5.19 points to close on 1,282.19.
Earnings were abundant Wednesday, creating a lot of volatility in individual stocks. However, it was the further decline in oil prices that ultimately left the markets up.
Oil prices fell nearly four dollars a barrel on Wednesday to close the session at $124.46. Even an unexpected decline in weekly crude inventory levels didn’t benefit crude bulls today. The EIA reported that crude inventory levels for the week ending July 18 fell by 1.6 million barrels. However, gasoline reserves were up by 2.9 million barrels. It seems that supply is surpassing demand with supply up 6.0 percent this past year, while demand is down 2.4 percent.
Finally after the close, the House of Representatives approved a bill that will provide an unlimited amount of credit for Fannie Mae and Freddie Mac. The fact traders were expecting this bill to pass benefited stocks, especially these two firms. FNM shares rose 11.86 percent to $15 with FRE up 11.34 percent to $10.80. Traders that were able to buy the bottom for these two stocks have done very well with the low for FNM at $6.68 and at $3.89 for FRE!!! However it easily coild have gone the other way on these stocks!!
I think this rally has another a few days to go....then we can look at what the markets have out there for us.
Until next time.
Earnings were abundant Wednesday, creating a lot of volatility in individual stocks. However, it was the further decline in oil prices that ultimately left the markets up.
Oil prices fell nearly four dollars a barrel on Wednesday to close the session at $124.46. Even an unexpected decline in weekly crude inventory levels didn’t benefit crude bulls today. The EIA reported that crude inventory levels for the week ending July 18 fell by 1.6 million barrels. However, gasoline reserves were up by 2.9 million barrels. It seems that supply is surpassing demand with supply up 6.0 percent this past year, while demand is down 2.4 percent.
Finally after the close, the House of Representatives approved a bill that will provide an unlimited amount of credit for Fannie Mae and Freddie Mac. The fact traders were expecting this bill to pass benefited stocks, especially these two firms. FNM shares rose 11.86 percent to $15 with FRE up 11.34 percent to $10.80. Traders that were able to buy the bottom for these two stocks have done very well with the low for FNM at $6.68 and at $3.89 for FRE!!! However it easily coild have gone the other way on these stocks!!
I think this rally has another a few days to go....then we can look at what the markets have out there for us.
Until next time.
# posted by Paul @ 1:23 AM 
