This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Rally Pauses as Oil Perks Up

The September rally paused Monday as oil and gas bounced off of their recent lows.

Oil rose above $64 in intraday trading before ending up 0.73% to $63.79 per barrel. Gasoline gained 0.7% to close at $1.58 per gallon, and heating oil jumped 1.51% to close at $1.72 per barrel.

Major averages were relatively flat Monday, but signs of anxiety emerged after the recent rally and ahead of a hefty week of economic data and a Federal Reserve policy meeting.

"We reset the bar of tolerance every week," says Art Hogan, chief market strategist at Jefferies & Co. For a while, $70 per barrel was tolerance, then $75, and now that oil dipped below $63, $64 is a little disquieting, he says.

"Non-traditional investors are fueling the market, and in energy in particular," says Hogan. "Momentum came into the space, and these cowboys get in and out at the same time. We're seeing some of that now."

Indeed, news emerged Monday that the large hedge fund Amaranth's returns were in the red by 35% because of its bad bets in natural gas. Last week, The Wall Street Journal highlighted several large hedge funds that were sporting returns not even matching the S&P 500's 5.8% year-to-date return.

The FOMC meeting Wednesday is not expected to bring any surprises (read: the Fed leaves the funds rate at 5.25%). But news on housing and inflation could always challenge the market's self-assurance about an economic soft landing. The Labor Department reports the producer price index Tuesday, and the Census Bureau reports on housing starts.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
SFD $0.00 0.00%
SBB $49.28 0.00%
FSL $40.44 0.00%
OIH $37.36 0.00%
XLE $81.91 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs