Day Traders Diary


U.S. stocks fell sharply at the open on Friday, as traders returned from the Thanksgiving holiday to be met by global nervousness over debt woes for Dubai World. The Dow Jones Industrial Average dropped 201 points, or 1.9%, to 10,261, weighed down by more than 3% drops in shares of Alcoa, Caterpillar, and General Electric. The S&P 500 index fell 26 points, or 2.3%, to 1,084, while the Nasdaq Composite slumped 50 points, or 3%, to 2,125. The good news is very few U.S. firms have direct exposure to Dubai. Citigroup has modest exposure to the United Arab Emirates region. Citigroup and the rest of the U.S. banks are only modestly lower. The bigger exposure is for European investment banks like Barclays and Duetsche Bank. Both are lower by 6%. Another foreign bank HSBC is lower by 6% as well. The bigger impact in the U.S. is foreign investors flocking to the U.S. dollar for safety. The markets have moved inversely with the dollar for some time. The bump in the dollar is also hitting the commodities. The price of oil is lower by 5%. Gold is down 2.5%. After the first half an hour the averages bounced a little off the lows, but virtually everything is lower. Through the morning more of the same. Volume is light as many investors are taking off this abbreviated trading day. In the last hour, noon to 1pm, the averages tried to rebound, then sold off. The Dow Jones Industrial Average finished down 154 points, or 1.5%, at 10,309. The S&P 500 index fell 19 points to 1091. The Nasdaq Composite ended down 37 points, or 1.7%, at 2,138. For the week, the Dow fell 0.1%, the S&P 500 fell 0.01% and the Nasdaq dropped 0.4%.

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