Special to Business Media Network
The tech-heavy Nasdaq Composite was able to beat back early day selling and end the day with strong gains. The Dow Jones wasn't so lucky as weakness in the blue-chips limited the index to a minor gain. Oil and gas and base-metal stocks led the TSE 300, yet it wasn't enough to offset the selling of technology and bank shares.
With the US Federal Reserve out of the way, most blue-chips hit an air pocket as investor's attention turned to the energy related stocks and the technology sector.
Crude oil futures in New York jumped more than US$1 in early trading as data showed stockpiles fell unexpectedly last week and are again near the lowest levels in 24 years.
The news was substantiated by both the American Petroleum Institute and the U.S. Department of Energy. The former organization reported inventories fell amid an increase in refinery operations while import levels were near unchanged.
There's an overwhelming feeling that with dwindling inventories and concerns that OPEC won't raise supply enough when it meets Sept. 10, prices could hit a new 10-year high within the next month.
The Nasdaq came back from an early day weakness with gains by Cisco Systems, the Internets (AOL, Yahoo!), PC makers (Sun Microsystems, Dell, IBM), and semiconductor manufacturers (Intel, Texas Instruments, Xilinx).
Trading volume of late has been on the low side, but today it was encouraging to see buyers come in and pick up bellwether names on the first signs of weakness.
Bank shares on both sides of the border gave back some of the gains leading up to the recent Fed decision to leave short-term interest rates unchanged. Here at home, the weakness was attributed to profit-taking in an overbought sector, with the impetus coming after Bank of Montreal's less-than-enthusiastic earnings numbers.
Dhaliwal is President and chief market strategist of Kirn Dhaliwal Associates.
Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. At time of publication, neither Dhaliwal nor Kirn Dhaliwal Associates held positions in any securities mentioned in this column, although holdings can change at any time. While Dhaliwal cannot provide investment advice or recommendations, he invites your feedback.
