The European currency roared back from yesterday's three month lows against the dollar as Greece began to implement the austerity measures demanded by its creditors and reopened its banks for limited business.
Equities were hard hit by disappointing results from two mainstays of the technology sector, IBM and United Technologies. In afternoon trading the Dow was off 1.14 percent, 206.68 points to 17,893.73. The S&P 500 had slipped 0.55 percent, 11.52 points at 2,116.63 after nearing May's all-time record of 2,134.72 yesterday at 2132.72. The Nasdaq was the best performer among the major exchanges, losing 0.24 percent, and 12.250 to 5,206.684 following yesterday’s third consecutive all time high 5,231.943.
The U.S. Dollar was lower against major currencies. The euro had gained 1.17 percent to 1.0942 in the early afternoon, having touched 1.0809 yesterday its weakest since April 25th. The yen was stronger as well trading at 123.80, near the low in the day's 123.76-124.48 range. The Australian Dollar gained 0.9 percent at 0.7430, while the kiwi jumped 1.2 percent to 0.6639.
Spot gold prices held above yesterday's five-year low of $1,086.18 at $1,102.46.
The seeming end of the threat of a Greek exit from the euro has crushed gold prices and the safety trade. The precious metal is down 4.2 percent from Friday's close and 6.3 percent on the month. Downward pressure seemed likely to remain strong due to sluggish Chinese demand and a possible Fed rate hike in September.
International Business Machines skidded 5.6 percent after reporting falling sales for a 13th quarter. United Technologies, a defense and technology company, shed 7.7 percent after reducing its 2015 profit forecast. Together they accounted for about 56 percent of the Dow decline. Apple Inc. of Cupertino, California also lost ground, down 0.64 percent at 2:03 pm at 131.23.
The dollar index (DXY) was 0.8 percent lower at 97.240 after touching a three-month peak at 98.151 earlier Tuesday.
Chief Market Strategist
WorldWideMarkets Online Trading