As was to be expected, the markets continued to face some headwinds yesterday in the form of HP’s poor quarterly results and continuing civil unrest in Libya.
The day could have been a lot worse, but the S&P; 500 found support mid-day at the psychologically important 1,300 level, rebounded and managed to cut into its losses.
Crude oil was the big story of the day as it touched $100/barrel before settling at $98.10. Gold headed higher as well joined by the energy complex and commodities.
The turmoil in Libya continued as the country’s oil production was shut down and exports were halted. Speculation grew that crude could hit $220/barrel, which would cause economic turmoil around the globe.
The fallout from Libya was great for the oil and energy sector, but there is certainly more to come that will affect global stock markets. Whether this will be the beginning of the end of the current bull cycle is anyone’s guess at this point.
So far, with the S&P; 500 having lost 2.7% over the past 2 days, this correction can only be considered modest. Time will tell if this pullback will serve as a new springboard for higher prices, or if we’ve seen the highs for some time to come.