Dow 12,943 (+0.56%) S&P 1,371 (+0.62%)
All quiet on the Wall Street front. With the New York Stock Exchange closing early at 1pm before tomorrow’s July 4th off-day, trading volumes were again (as expected) low today – trading screens were filled with about as much action as a soccer game most of the morning. Despite an emptier exchange floor, blue chip stocks pushed the Dow up 72 points on the Commerce Department’s report that “Factory Orders” (for manufactured goods) rose 0.7% in May, much higher than forecast. Energy stocks led the way on political developments in the Middle East, but the real headline was the shakeup at Barclays.
and oil prices up on Iran worries
Energy companies propelled the S&P 500 stock index as oil futures contracts rallied nearly 5% on new geopolitical concerns over Iran. That Poly-Sci class case study-like development was the Iranian military practicing weapons exercises with missiles capable of hitting Israel and threatening to close the Strait of Hormuz that’s critical for sea-trade (their reaction is in response to the US-European missile shield defense system that would target Iran). We’ve all seen this before (both in Harrison Ford thrillers and in real life – like last April), but even if it feels like a re-run, investors will continue to react the same way. The primary worry that tensions with the Middle East will affect oil supplies and therefore oil prices sent energy stocks like oil powerhouse Exxon Mobil (XOM) up over 1% and oil producer EOG Resources (EOG) up nearly 7%.
Barclays CEO steps down after Libor rate controversy
Barclays (BCS) CEO Robert Diamond resigned following investor/political pressures over the British bank’s interest rate manipulation scandal. The firm’s Chairman and CFO also stepped down, no successors have been named yet and Diamond will be entitled to 6 months of his $2.12 million salary and a fountain pen. Last week, we described to you how Barclays paid $450 million to settle charges it altered Libor rates, charging customers incorrect interest rates to illegally get more money out of them (the clients were not amused). The “London Interbank Offering Rate” is the interest rate banks charge to borrow short-term funds from one another and is often used as a standard interest rate for loans to clients. Diamond is already scheduled to testify in front of a UK regulator tomorrow over whether he/other managers directly ordered traders to alter rates – and other banks may have been involved. Today’s Hoover-sized leadership vacuum dropped the stock 2.14%.
- MARKETS CLOSED FOR INDEPENDENCE DAY – enjoy accordingly.
- Thursday & Friday are big for June econ data – ADP Jobs Survey, ISM Non-manufacturing, Non-farm Payrolls and Unemployment Rate – MarketSnacks will have you covered…
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