Market Review By TraderXP:
Gold price cycle has probably been, as the U.S. economic recovery is gaining momentum and the collapse of investment holdings, according to Goldman Sachs Group Inc, which reduced the outlook for the metal.
"In turn, the gold cycle, most likely, already begun," Goldman analysts wrote in a report after the prediction of the end of Bull Run in gold Dec. 5 note. "The latest collapse in gold ETF holdings stands in sharp contrast with our assumption that the ETF position werelikely from long distribution, and not short-term trading."
Market News
WallStreet trips and falls in dull Italian elections
Shares on Monday suffered the biggest drop since November, after a strong showing in the Italian elections groups opposing economic reforms have caused fear that Europe's debt problems could again destabilize the global economy.
Reduction was a large percentage falling to 500 Index Standard & Poor test since November7, anddrove S & P to its lowest close since Jan. 18. Volatility index, or CBOE VIX, a favorite barometer of Wall Street fear, rose 34 percent, its biggest jump since Aug. 18, 2011.
Sales accelerated at the end of the trading session after the S & P 500 fell below the 1,500 level, which serves as the main point of support. Monday was the first close below S & P 1500 from February 4.
Italy's center-left coalition has a slim ahead of the center-right bloc of former Prime Minister Silvio Berlusconi's election to the lower house of parliament, three-view TV set. But any government should have the majority in the Senate race, which is solved in the region.
As a result of the parliament could lead to new elections and questioned the ability of Italy to pay their debts.
"Europe has not disappeared as a problem, it will stick, and it rears its ugly head today," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
"If someone is elected, who is just not going to play by the rules, they're going to do? This puts them in a real quandary here because of their financial support, the support of all their money due to the fact that these austerity programs are to be in place. "
Earlier surveys indicate a margin of victory of the center-left in Milan and other European markets as well as helpedlift S & P 500 to session high of 1,525.84 on optimism that Italy will continue to move through their austerity.
After a strong start of the year, stocks retreated recently. The slight decrease in S & P 500 last week was its first weekly drop after seven weeks of the line benefits.
In a volatile session on Monday, banks and other financial stocks were among the worst performers on concerns about the impact of massive debt thesector in Italy. KBW bank index fell 2.7 percent.
CBOE Volatility Index ended at 18.99 to 34.02 percent.
Index Dow Jones Industrial Average fell 216.40 points, or 1.55 percent, to 13,784.17 at the close. 500 Index Standard & Poor lost 27.75 points, or 1.83 percent, to 1,487.85. The Nasdaq Composite Index fell 45.57 points, or 1.44 percent, to 3,116.25.
Although in general the market lost ground on Monday, there were some bright spots.
Barnes & Noble Inc shares soared 11.5 percent to $ 15.06 after the bookseller's chairman offered to buy its retail business decline.
Amgen Inc shares rose 3.1 percent to $ 89.55, after rival Affymax issued a voluntary recall of a single drug, the treatment of anemia, which competes with the best-selling Amgen red rocket blood cells, Epogen. Affymax shares lost 85.4 per cent to $ 2.42.
FTSEurofirst-300 index of leading European shares rose 0.04 percent and Italy's FTSE MIB was the main by 0.7 percent after earlier gaining almost 4 percent.
Political uncertainty on the domestic front, but also on the mind of Wall Street.
U.S. stock markets will face a test with the impending debate on the so-called sequestration - the U.S. government budget cuts, which will come into effect from Friday if lawmakers fail to agreementover spending and taxes. The White House has issued a warning about the dangers of thecuts, likely to inflict on the economy, if adopted.
"Sitting there are a thousand-pound gorilla - sequestration issue - and, of course, nothing ishappening there," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
Lowe's Companies Inc lost 4.8 percent to $ 35.86 after the home improvement retailer posted fourth-quarter profit.
With 83 percent of the S & P 500 companies that have reported results so far, 69 percent beat profit expectations, compared with 62 percent of the average in 1994 and 65 percent over the past four quarters, according to Thomson Reuters.
In the fourth quarter earnings for S & P 500 companies are estimated to have increased by 6 percent, according to the data, 1.9 percent higher than forecast at the beginning of earnings season.
Tom was active about 7.27 billion shares traded on the New York Stock Exchange, NYSE and Nasdaq MKT, above the daily average 6.46 billion.
Declines outnumbered advancingones both the NYSE and Nasdaq in the ratio of 4 to 1. Reuters.com
Currencies
Eurosags, to about seven-week low against the dollar after the vote, dirty Italy
The euro drifted close to seven-week low against the dollar while the yen kept some distance from the multi-month low on Tuesday, as the specter of political deadlock in Italy spurred traders to seek asylum in the U.S. and Japanese currencies.
Italy's center left won in the House, as expected, but the forecast for the Italian media indicate no party or coalition is able to form a majority in the upper house of parliament.
Deadlocked parliament could threatenItaly economic reforms and renewed concerns about the euro zone debt. This could undermine the optimism that the worst of the crisis in the region has been completed, which brought the euro and risky assets in general this year.
Euro traded at $ 1.3056 at midday, after falling as low as $ 1.3042, the lowest since Jan. 10.
Support is at $ 1.3032 from below the daily Ichimoku chart. Break would send a strong bearish signal, and probably open the way for his trial on January 4 low of $ 1.2998.
The single currency fell sharply especially against the yen, down 2.6 percent on Monday, the biggest daily loss since May 6, 2010, when investors were shocked by the violent streetprotests in Greece caused by austerity measures.
The euro fell to 118.74 yen minimum on Monday that a whopping 6.5 yen from the day in high 125.36 yen. This lasttraded to 120.16 yen.
The dollar last traded at 92.03 yen, about 0.2 percent from late U.S. levels in volatile trade on expectations of purchases of Japanese importers.
The index of the dollar against a basket of other major currencies, was up 0.2 percent.
Whipsaw In Monday trading, the dollar fell as low as 90.85 yen, its lowest level in nearly a month, with a 33-month high of 94.77 yen hit earlier in the day on the news that Japan plans to appoint a proponent of aggressive monetary easing, Asian Development Bank President Haruhiko Kuroda, the next central bank.
Analysts say that the yen's steep losses in recent months on bets of further easing monetary Japan have made it vulnerable to sharp reversals.
Japanese Prime Minister Shinzo Abe's repeated calls for more decisive action of the central bank was a major force almost constant reduction yen since November.
"The yen is high time to correct, and it all had to be a catalyst. Downtrend yen could go your own way now," said Teppei Ino, a currency strategist at Bank of Tokyo-Mitsubishi UFJ.
While expectations of easing the Bank of Japan may limit the yen, the Japanese currency may be obtained by riskcurrencies, if risk appetite fades further.
In addition to the Italian stalemate, aU.S. stalemate over spending cuts, which threaten the economic recovery undermined market sentiment. U.S. President Barack Obama and Congress remain deadlocked over how to prevent $ 85 billion in auto spendingcuts government is going to start on March 1.
Priority, investors will be in Congress Federal Reserve chief Ben Bernanke in 1500 GMT, with some thunder to the debate at the Fed about how long it should continue to buy bonds to support the economy.
Sterling held slightly above its 31-month low against the dollar hit on Monday, although it is regarded as vulnerable on expectations the Bank of England could expand its further quantitative easing to support the fragile UK economy.
The pound bought $ 1.5205, holding above Monday's low of $ 1.5073. Bank of England Governor Mervyn King issued inTokyo at 0600 GMT. Reuters.com
