Wednesday, December 09, 2009

The dollar will resume its slide

SHOOT: When the dollar weakens, stocks advance. But ultimately a much weaker dollar could foreshadow a currency crisis.
clipped from
AP - FILE - In this Jan. 30, 2009 file photo, a trader leans on a phone post on the ...

An earnings forecast from 3M Co. and a sales report from McDonald's Corp. disappointed investors. The reports weighed on the Dow and overshadowed an increased profit forecast from FedEx Corp., whose results are seen as a gauge for the health of the economy.

Questions about debt levels in places from Greece to the Middle Eastern city-state of Dubai added to investors' concerns. Meanwhile, reports in Britain and Germany signaled that manufacturing remains weak.

Gold prices fell for a third straight day, sliding $20.60 to $1,143.40 an ounce. Crude oil fell $1.31 to settle at $72.62 per barrel on the New York Mercantile Exchange.

Analysts said the rising dollar was a big force behind the move in stocks, as it has been for months.

Peter Cardillo, chief market economist at the brokerage Avalon Partners Inc. in New York, predicts the dollar will resume its slide and remove pressure from stocks.

McDonald's fell $1.32, or 2.1 percent, to $60.61
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