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MARKET WRAP – STOCKS GIVE BACK BIG GAINS

Stocks were broadly higher in morning trade after positive European economic data and the stronger Euro.  A downgrade of Greek debt by Moody’s put a damper on sentiment as stocks gave back 1%+ gains to finished the day marginally lower.  It was a rather slow session on the whole with very low volume and mixed breadth readings.  There was little to no conviction in either direction.  The rest of the week will be relatively heavy in terms of data will set the tone for where markets are headed next.

From Daily Futures:

U.S. Economy
U.S. 30-year T-bonds are trading lower with more signs of improved global growth (see Currencies below). Most commodities finished higher and the September U.S. dollar index dropped 1.124 cents to 86.796.

Grains and Cotton
The USDA said that China bought 120,000 tons of U.S. corn for the current 2009-2010 season. December corn closed up 4 cents at $3.75.

July wheat finished up 10.75 cents at $4.515 with rain in Kansas possibly delaying the harvest of the winter wheat crop.

The USDA said that last week’s export inspections of:
Corn were up 15% from a year ago.
Soybeans were down 44% from a year ago.
Wheat were down slightly from a year ago.

Livestock
August hogs closed up 1.42 at 81.77, helped by talk of better world demand and a small, early improvement in the stock market.

Late Friday, the U.S. Meat Export Federation said that total beef exports were up 11% in the first four months of 2010 from a year ago. Total pork exports for the same period were down 4% from a year ago. August cattle closed up .85 at 88.12.

Coffee
July coffee closed up 6 cents at $1.5095, the highest close this year, after Friday’s big gain, supported by talk of tight world supplies and hopes for a stronger world economy.

Sugar
July sugar closed up .22 at 16.05, supported by today’s lower U.S. dollar.

Currencies
Europe received good news today. Eurostat said that industrial production in the EU-27 was up .5% in April and up 7.8% from a year ago, better than expected. In the Euro zone, industrial production was up 9.5% in April from a year ago, the biggest monthly gain since records began in 1991. The September euro closed up 1.67 cents at $1.2251.

Statistics Canada said that new vehicle sales were down 4.7% in April, weaker than expected. The September Canadian dollar closed up .66 at 97.01 as today’s positive report from Europe reduced investor demand for the rising U.S. dollar.

The U.K.’s Confederation of British Industry predicted that real GDP will be up 1.3% this year and 2.5% in 2011, better than previously estimated. The September British pound jumped up 2.61 cents to $1.4773.

Energies
August crude oil closed up .94 at $76.28, encouraged by signs of an improving world economy.

Metals
July copper closed up 8.80 cents at $2.9920, boosted by Europe’s report of a strong increase in industrial production.

August gold fell $5.70 to $1,224.50 as today’s positive economic news reduced the need for a “safe haven.”

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