November 8th, 2010
09:30 PM ET

Stocks drop; gold surges to record high

A look at highlights from the day's business news:

Stocks step down as gold steps up

Stocks ended lower Monday, as investors took a step back from last week's run-up and shifted their focus to the global economic picture.

The Dow Jones industrial average lost 38 points, or 0.3 percent, to end at 11,406.84. The S&P 500 dropped 3 points, or 0.2 percent, to close at 1,223.25, and the Nasdaq added 1 point to end at 2,580.05.

Instead, investors turned to commodities. Gold surged to a new record high, settling at a record $1,403.20 an ounce, as jittery investors continue to see it as a hedge against inflation.

"After last week's historic events, today is all new territory," said Adam Harter, chief strategist at Financial Enhancement Group. "We have nothing in history to compare last week to, so it's a lot for investors to digest."

Stocks rallied last week on two major pieces of news. Tuesday's midterm elections saw the Republican party win control of the House. On Wednesday, the Federal Reserve said it will buy $600 billion in U.S. Treasuries by the middle of next year to stimulate the economy.

Treasury yields higher following auction

Treasuries came under pressure Monday as investors turned to a bond auction for direction in the absence of major economic reports.

The Treasury Department got an early start to this week's auctions by selling off $32 billion in three-year notes Monday afternoon. Monday's auction was the first since the Fed announced it will purchase $600 billion of Treasuries by the second quarter of 2011.

The three-year note auction drew $104 billion worth of bids, for a bid-to-cover ratio of 3.26, suggesting that demand remains robust. Treasury bond auctions later this week include $24 billion in 10-year notes on Tuesday, and $16 billion in 30-year notes on Wednesday. Bond markets will be closed on Thursday for Veterans Day.

The yield on the benchmark 10-year Treasury note rose to 2.56 percent Monday from 2.54 percent on Friday. Bond prices and yields move in opposite directions.

Yields for the 30-year bond moved higher to 4.14 percent. The two-year note was unchanged at 0.37 percent, and the five-year note ticked up to 1.13 percent.

– CNNMoney.com reporters Julianne Pepitone and Charles Riley contributed to this report.

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Filed under: Business • Economy
soundoff (22 Responses)
  1. phil

    Hey Jim. Hay tomcat...nice discussion you all had last night. Interesting...zzzzzzzzzzzzzzzzzzz. Who? Oh, sorry about that. I must of dozed off. (yawn) He-he

    November 9, 2010 at 6:15 am | Report abuse | Reply
  2. phil

    Jim...you really need to investigate the Bush family. I know you mean well when you praise Presidents. But c'mon man! Try visiting the Bush Family Photo Album @ http://www.hereinreality.com for starters. ttl

    November 9, 2010 at 6:20 am | Report abuse | Reply
  3. dictionary

    The bogs, oh, I mean blogs are way more fun to read than the jews, oh , I mean news stories ...

    November 9, 2010 at 6:43 am | Report abuse | Reply
  4. dictionary

    I am getting increasingly frustrated with the crap quality of goods being manufactured. If it's quality craftmanship your looking for, there is nothing like the good old US of A.

    November 9, 2010 at 6:49 am | Report abuse | Reply
  5. Ancient Texan

    With the passage of time, President Bush will be regarded much like Harry Truman; one of our better presidents. He was subjected to one of the most turbulent times in American history and handled it pretty darn well. There were mistakes made, but he always had America's good in mind and heart. FDR's approach probably prolonged the bad economy by about seven years longer than necessary. WWII finally got us out of the depression.

    November 9, 2010 at 10:59 am | Report abuse | Reply
  6. Richard in Texas

    Everyone who does not agree with Tomcat and Jim should leave the counrty or be shot. I don't understand why the president doesn't listen to them and do what they say. They know what they are talking about and can save the country. Why won't anyone listen to them. They are super cereal. Got to love Southpark!

    November 9, 2010 at 5:34 pm | Report abuse | Reply
  7. jl taylor

    Suzanne Malveaux is fine. I enjoyed watching her report on the President's boyhood home I Indonesia.

    November 9, 2010 at 8:01 pm | Report abuse | Reply
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