Dollar, Dow Gain − Despite Negative News
Thu, Aug 14 2008, 20:00 GMT
by Andrei Pehar
The consumer price index came in at 0.8% today, rising at
the fastest pace in 17 years. Analysts had been forecasting an increase
of 0.4%. The largest increase came in food and energy, with the core CPI
(which excludes those elements) posting an increase of 0.3%, compared to estimates
of 0.2%
In addition, existing home sales fell by 16%, with the median price dropping by
7.6%, falling to a 10-year low. Worse still, forecasters are saying there
is room for further drops, as the US economy tightens by an estimated
1.8% this quarter.
Surprisingly, despite the news, the Dow posted a moderate gain today, closing
up by 82.97 points at 11,615.93 - likely due to oil backing off from
yesterday's high slightly (and trading below key resistance level at 115.75),
as well as gold coming back down towards the 800 mark. The US Dollar also
won ground against the Euro today, at one point testing the 1.4777 level.
