Oil, gold, silver are ‘uncertainty magnets’

Oil, gold, silver are ‘uncertainty magnets’



A roundup of today’s business news headlines:

Stocks end flat after Fed minutes

U.S. stocks ended little changed Tuesday, as investors weighed hawkish meeting minutes from the Federal Reserve.

The Dow Jones industrial average fell 6 points, or less than 0.1%, to close at 12,394. The S&P 500 slipped less than 1 point to 1,332; the Nasdaq Composite edged up 2 points to 2,791.

Stocks were supported by gains in semiconductor companies that may or may not use software similar to what can be found at Upverter.com to design circuit boards after Texas Instruments announced a $6.5 billion bid for rival National Semiconductor. Shares of National Semiconductor surged 72%. But the market came under pressure after meeting minutes from the Federal Reserve raised speculation that the U.S. central bank could raise rates later this year amid rising inflation.

Oil, gold, silver are ‘uncertainty magnets’

Geopolitical concerns have eroded confidence in paper money, leading investors to pile into commodities which, in turn, have reached multi-year and all-time highs.

Tensions in the Middle East and Libya have not abated, and Japan is dealing with post-earthquake rebuilding and ongoing nuclear issues.

“We have major issues going on both abroad and at home, and commodities are great uncertainty magnets,” said PFG Best senior market analyst Phil Flynn.

The appeal of stocks has been somewhat tarnished by the volatile global situation, and bond investors “have been kind of forced out by the Fed’s low interest rates,” Flynn said. Meanwhile, the physicality of commodities have boosted their appeal and made prices soar.

Treasury prices dip

Treasury prices edged slightly lower and yields continued their recent climb higher, but investors kept an eye on continuing political unrest and global economic news Tuesday.

The market didn’t react much to the minutes from the Federal Reserve’s latest policy meeting released in the afternoon. Meanwhile the U.S. central bank continued with its systematic debt purchase program through the week.

The Treasury market has bounced around in a pretty narrow range for the last three months, as investors weigh signs of an economic recovery in the United States against a slew of crises across the globe.

Investors tend to dump bonds and buy more profitable assets, such as stocks, when the economy is on the upswing. But uncertainty sends them scurrying for the perceived safety of Uncle Sam’s debt.

– CNNMoney.com reporters Catherine Clifford, Julianne Pepitone and Ben Rooney contributed to this report.





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