Thursday, 22 October 2015

US stocks fall but short interest shows near term positive

US stocks fell for a second day on Wednesday, with the S&P 500 falling 0.6 percent.

The US stock market was dragged down by a 0.9 percent drop in the S&P 500 Health Care Sector Index after Valeant Pharmaceuticals International tumbled following a report by Citron Research examining a specialty pharmacy the company uses to facilitate drug sales to patients.

Yields on US 10-year Treasuries fell four basis points to 2.03 percent.

Oil in New York also fell to a three-week low and gold slid the most this month.

Encouragingly for equities, however, Bloomberg reported that JPMorgan Chase has calculated that the US stock market still has $90 billion in short sales left to cover, “a clear near term positive for stocks”.

Gene Peroni of Advisors Asset Management said: “Given there’s a little clarity to the Fed not raising rates until next year, oil stabilizing, banking stocks coming up even though earnings are mixed, the indications are there is real buying going on.”

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