(CercleFinance.com) – Wall Street fell slightly on Friday, bending under the weight of some profit taking without much surprise after the powerful rebound in recent weeks.
At the end of the morning, the Dow Jones fell 0.1% to 34,925.8 points, while the Nasdaq Composite dropped 0.2% to 14,089.8 points.
Over the week, the Dow is up 1.8% so far and the Nasdaq is up more than 2.1%. With gains of around 7% since November 1, both are heading towards their best monthly performance since the start of the year.
After such a journey, investors seem tempted to curb their enthusiasm rather than risk losing their recent gains, especially since no catalyst justifies taking new positions.
Market sentiment was not supported by better-than-expected real estate figures released early this morning.
The Commerce Department reported a 1.9% increase in housing starts in October, to 1,372,000 at an annualized rate, a level rather above economists’ expectations.
Likewise, US housing building permits – supposed to foreshadow future housing starts – increased by 1.1% to 1,487,000 at an annualized rate last month, also exceeding the market consensus.
The most marked sectoral declines of the day affected the compartments which had behaved best recently: technology lost 0.5% and telecoms 0.9%.
Treasury yields continue to fall, with the 10-year yield at its lowest in two months, at 4.45%, in a climate that remains cautious regarding equities.
The rush on US Treasury bonds which followed the publication on Tuesday of reassuring inflation figures resulted in a drop of almost 20 points in ten-year paper over the week.
Oil prices rebounding after a trying week, with the December contract on American light crude (West Texas Intermediate, WTI) climbing 3% above $75.
Over the week as a whole, the WTI lost almost 3% due to the easing of fears of an escalation of the Israeli-Palestinian conflict and the rise in power of speculators. This is its fourth week of decline in a row.
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