Binary Options Daily Review August 26, 2010

Stocks:

U.S. stocks finished higher on Wednesday, after a late reversal helped the Dow Jones Industrial Average end a four-session losing streak, with investors buying up stocks of home builders and other consumer issues following further round of disappointing housing news.

In Asia shares traded mostly higher Thursday, with several indexes moving in and out of negative territory.  Japan’s Nikkei Stock Average returned from an afternoon lull to trade 0.4% higher, and the Topix up 0.2%, as the yen remained little changed from its morning levels.

Currencies:

The dollar regained its earlier advance versus the Japanese yen but stayed lower against the euro on Wednesday as stocks turned up after being weighed by softer-than-predicted U.S. economic data.  Still, investors started looking for real value and the trend is expected to continue in today’s trading.

The  strong dollar was supported by U.S. data showed durable-goods orders rose last month but at a pace far less than analysts anticipated.

The euro was also caught between Portugal’s strong bond auction and Standard & Poor’s downgrade of Ireland’s bond rating, while the yen fell back somewhat.  The yen tends to be the biggest loser when stocks decline, which currency traders take as an indication that investors are more comfortable taking risks and moving out of the safety of the low yielding yen.  The dollar also often loses against the euro when risk appetite increases.

Commodities:

Crude-oil futures ended Wednesday in positive territory, despite a surprise increase in inventories and weak economic data that offered little hope for a real surge in demand.

Crude for October delivery rose 89 cents, or 1.2%, to settle at $72.52 a barrel on the New York Mercantile Exchange, after setting an 11-week low on Tuesday.  Earlier in the session, oil had posted an intraday low of $70.69 a barrel.

Crude prices have fallen nearly $10 a barrel in just over two weeks following weaker equities and a stronger U.S. dollar amid growing doubts about the strength of the global economic recovery.  While the bearish undertone prevails, analysts say crude might be set up for a technical bounceback in the near term with strong support around $70 a barrel.