A Sharp Drop Leads to a Negative Session, the Euro Holds within its Wedge

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A Sharp Drop Leads to a Negative Session, the Euro Holds within its Wedge

Post  harpal1980 on Fri Nov 20, 2009 2:05 am

Investors became skeptic around high levels yesterday, sending the major stock indices into negative territory. Risk aversion already appeared at the start of the U.S session, as economic data showed that the employment situation wasn’t improving. Even though other leading indicators such as the Philadelphia Fed manufacturing index, showed that certain parts of the economy are still improving, it wasn’t enough to prevent an equity drop.

Initial jobless claims weighed on investors at the start of the session, as the number showed that a further 3000 people had filed for unemployment benefits this week. Analysts were expecting only 502k, but the result came out at 505k. In addition, the leading index which measures the overall economic health, by combining 10 indicators such as building permits, new orders, money supply and average workweek, disappointed analysts, whom were expecting a 0.5% figure. The number came out at 0.3%

Stocks nose dived at the start of the session, led lower by the techs. Even though the major indices found support during the session, all the three indices closed in red. The S&P500 finished the session, with a loss of -1.34%, while the Nadaq closed down by 1.58%. By taking a glance at the chart below one can see that yesterday’s session, sent shivers down investor’s spines, especially as volume exploded higher.

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