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Santa Stuck in the Chimney - Money Matters for 12/21/05
Traders trudged to Wall Street this morning and bought everything in sight. By mid-day, the buying was over and selling resumed into the close.
Undaunted by the MTA transit strike, Wall Street firms worked diligently through the past two days, keeping trading volumes intact and putting their best faces on what seems to be a gloomy holiday season.
While oil prices have moderated a bit, natural gas has not, sending a chill along with a coming big bill for many individuals and businesses in the Northeast. The fear of outlandishly high home heating bills this winter was enough to put the kibosh on Christmas sales at many of the nation's largest retailers.
Most of the anecdotal evidence continued to indicate that the shopping season of 2005 fell short of expectations, though it was not a complete disaster. With only one full day of shopping remaining, more and more talk is focusing on after-Christmas sales, internet businesses and redemption of popular gift cards.
While the holiday shopping season has evolved - due in no small part to the emergence of the internet as a viable alternative to mall visits - department store chains and discount retailers have had to cope with changing habits of shoppers and the relatively new phenomenon of price slashing during the season.
There was a time, not long ago, that retailers eagerly awaited the holidays, as eager customers paid full price for goods in a healthy orgy of consumerism. Those days are no more, as discounters such as Wal-Mart and Target have changed the dynamic of the season into one of cutthroat competition and high-stakes marketing.
With the season almost done, retail experts will begin the number-crunching and analysis of the season. While most reliable figures will not be out until the first few weeks of January, early returns are coming in as less-than-outstanding.
Looking past the holiday, the cold December weather is raising fears among business leaders that heating costs are going to have a severe impact through the winter. With those costs expected to rise as much as 50-75%, the affect on business could be devastating. Not only will their customers have less to spend, but their operating margins are also adversely affected by the meteoric rise in what used to be a relatively fixed cost.
While the indices all turned in modest gains, they remained just south of their highs as caution took over afternoon trade. The Nasdaq new highs - new lows metric got back into positive territory after rolling into the red yesterday, but the NYSE remained negative.
Gold was traded down below $500, while silver continued its dramatic run, staying in the black with a 4 cent gain and closing at $8.44 per ounce. The word on silver is that it is due for a pullback, though the downside for gold appears to be greater.
Dow Jones: +28.18; 10,833.73 close
NYSE Advancers: 2069
Nasdaq Advancers: 1842
NYSE New Highs: 99
Nasdaq New Highs: 81
Gold: -1.70; 495.30 close
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