Daily Market Commentary for September 6, 2011

Sharp drop in stock-index futures called for the NYSE and NYSE Amex Cash Markets to invoke Rule 48. (read more at Millennium-Traders.Com) http://www.millennium-traders.com/ne...ommentary.aspx


Europe’s debt crisis shows continued concerns of damage to major banks in the region. Finance ministers from Germany, Finland and the Netherlands were meeting today to discuss Finland’s request for collateral in aid for Greece.

The run to assets perceived as safe had 10-year Treasury yields falling to a record low. Before the lunchtime hour, the Dow Jones Industrial Average was lower by over 300 points with all 30 of its components in the red. We began the new month of September on a down note after the official end of the summer vacation season.

Institute for Supply Management’s services index reportedly climbed to 53.3 last month from 52.7 in July. Readings over 50% indicate more firms are expanding than contracting, the index is still well below its recent peak of 59.7% in February. The U.S. service sector employs about four of every five workers and accounts for three-fourths of all economic activity. While the increase in activity in August was small, the ISM report is one of the few indicators in recent weeks to show some improvement in the U.S. economy. New-orders portion of the ISM service index rose 1.1 percentage points to 52.8%, bouncing off a two-year low and the backlog of orders index climbed 3.5 percentage points to 47.5%, the first increase in five months. Prices index jumped 7.6 percentage points to 64.2%, reflecting the high costs that companies continue to pay for raw materials or service integral to their own businesses. Employment index dropped to 51.6% from 52.5%, suggesting that fewer companies have plans to hire. Only 10 of the 18 service sectors tracked by ISM reported growth - down from 13 in July and 15 in June. Mining, information services and retail posted the biggest growth while education, entertainment and recreation and business services contracted the most.

Traders are increasingly seen turning to see what actions may be taken by the European Central Bank as well as the U.S. Federal Reserve and U.S. President Barack Obama.

Swiss franc fell the most ever against the euro after the Swiss central bank imposed a cap on the currency’s exchange rate. The Swiss central bank’s surprise setting of a floor for the euro at 1.20 francs triggered a dramatic round of short-covering in the euro-Swiss franc cross. The SNB set a floor to protect exporters from a strengthening currency making them less competitive globally, threatening Switzerland's economic growth. The announcement comes after Swiss inflation fell again, adding an incentive for the Swiss central bank to act in order to deflect the risk of deflation.

In Italy, lawmakers were set to debate an austerity proposal as the country’s largest union called for a strike.

Gold for December delivery climbed to trade above $1900 an ounce today, striking yet another new, all time high. As of the noon hour, Gold touched intraday record high of $1,923.70 an ounce.

Temple-Inland (NYSE: TIN) shares were higher by 25% or up over 6 points into mid-day trading after International Paper (NYSE: IP) reached an agreement to acquire the shipping-box maker for $32 a share.


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