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Jul 22, 2013

Jim Sinclair: Comex must change its delivery mechanism soon: GATA I THE GATA DISPATCH JULY 22, 2013.

Jim Sinclair: Comex must change its delivery mechanism soon

By Jim Sinclair
Monday, July 22, 2013

The cause of today's spectacular rise in the gold price is the continuing large decline in the Comex warehouse gold inventory. Because of the continued fall in gold inventory, within 90 days the Comex must change its delivery mechanism.

The highest probability is that the Comex will have to move to cash settlement rather than gold. Part of that settlement could be lots of 100,000 shares in the gold exchange-traded fund GLD, the threshold amount of lots that can be exchanged for gold.

But if GLD is part of the settlement mechanism for the spot Comex contract, convertibility eventually will destroy GLD. What is convertible into gold will in fact be converted over time.

 Gold rose today because the knowledgeable know the inevitability of the changing of the Comex contract. This is the emancipation of physical gold from the fraud of no-gold paper gold.

Emancipation will cause physical gold exchanges to be born and to become the discovery mechanisms for the price of gold. This will end the use of paper gold futures contracts to make the gold price sing and dance at the will of the manipulators.

With manipulation coming to an end, the true value of gold will be discovered by the cash exchanges that are starting. The advent of cash spot exchanges around the world is the natural demise of the Comex setup as what is convertible is being converted.

As long as one can buy spot, pay insurance and transportation, have the gold recast by the Rand Refinery into Asian products, and sell it profitably, the demand for real gold will end the heyday and even the very existence of gold futures exchanges.

Gold is headed back to trading as it did before 1973. Gold will trade well above $3,500 and those like me who for 53 years have lived in the gold market know it.

A price of $50,000 for gold is not out of the question as a result of its emancipation from fraudulent no-gold paper gold.

GOFO is screaming this truth. The warehouse inventory of every futures gold exchange is screaming this. That there is no meaningful above-ground supply of gold is screaming this. That most of the central banks' gold is leased is screaming this.

There is no reason why gold cannot move up hundreds of dollars a day when the Comex changes its spot contract settlement, as it must and will very soon.

* * *

Goldman Sachs creating artificial shortage of metals: RT America July 22, 2013.

Rush that salvaged bullion to the LME!: GATA I THE GATA DISPATCH JULY 22, 2013

Rush that salvaged bullion to the LME!

Odyssey Exploration Recovers Silver from Shipwreck
By the Associated Press
via Yahoo News
Monday, July 22, 2013

TAMPA, Florida -- A U.S. deepwater salvage and exploration company said today that it has recovered more than 61 tons of silver bullion this month from a British cargo ship that was torpedoed during World War II.

The company, Odyssey Marine Exploration, said the recovery includes 1,574 silver ingots weighing about 1,100 ounces each. The silver was recovered from a depth of nearly three miles, and marks a record for the deepest and largest precious metal recovery from a shipwreck, the company said.
The company said the silver has been moved to a secure facility in the U.K. It said its contract with the U.K. Department of Transport calls for the company to retain 80 percent of the salvaged value of the cargo. At current prices the silver would be worth over $35 million.

The SS Gairsoppa is a 412-foot steel-hulled British cargo ship sunk in 1941 by a German U-boat about 300 miles off Ireland's coast. It sits 15,420 feet deep.
Odyssey said 2,792 silver ingots have now been recovered from the Gairsoppa, which is more than 99 percent of the insured silver reported to be aboard the ship when it sank.
The company said sources including Lloyd's record of war losses show that uninsured government-owned silver may have been aboard the ship, but so far no uninsured silver has been found.
Odyssey used remote vehicles to recover the silver. The company said the recovery was complicated by the size and structure of the Gairsoppa, and the latest silver was stored in a small compartment that was difficult to access.

* * *

CNBC Latest Stories - Evening Brief - July 22, 2013.


NYT International Herald Tribune Global Update July 22, 2013.

July 22, 2013
Compiled 20:45 GMT

Global Update


Report Finds Gradual Fall in Female Genital Cutting in Africa

An assessment by Unicef describes the ancient practice as "remarkably tenacious," but finds declines in the procedure in more than half of the countries where it is concentrated.

Glaxo Says Executives May Have Broken Chinese Law

The statement comes amid signs that other drug makers could also come under scrutiny from the authorities in China.

European Union Adds Hezbollah to Terror List

An effort led by Britain brought a unanimous decision against the group's military wing. Sanctions are expected to include asset freezes.

Video: A Mormon Doubts

Hans Mattsson was once a high-ranking leader for the Mormon church in Europe. He joins others who are experiencing a crisis of faith and finding few answers from their church.

Op-Ed Contributor

We Had Our Tamarrod, and Failed

The Cairo protests reminded me of my Venezuela in 2007, but we did not succeed.

Duchess of Cambridge Gives Birth to a Boy

Kensington Palace announced that the baby, who is now third in line to the throne, was delivered at 4:24 p.m. local time, weighing 8 pounds, 6 ounces.

Earthquakes Hit Area of Northwestern China

The authorities said 75 people had been confirmed dead after a series of powerful quakes shook parts of Gansu Province.

Russia Says Assad Is Ready for Peace Talks

Sergey V. Lavrov, the foreign minister, blames rebels for stalling and asks the United States for help in the negotiations.

For Obama, Another Round With the Economy

Foreign and domestic issues sometimes seem to conspire to push the White House's attention away from the economy, but the president is trying again.

New Leader for Al Jazeera America

Kate O'Brian, a 30-year veteran of ABC, has been named president of the forthcoming international news channel funded by the emir of Qatar.

STMicro and France to Invest in New Microprocesors

STMicroelectronics said it would make the investment in conjunction with the French government to develop chips for smartphones, TV decoders and home routers.

Activist Investor to Step Down From Yahoo Board

Daniel S. Loeb, whose campaign to change Yahoo culminated in the appointment last year of Marissa Mayer as the company's chief executive, is resigning from the board.

For Developing World, a Streamlined Facebook

To expand its user base, the Internet giant is developing a slimmed-down interface for those whose Internet access is generally via cheap, unsophisticated cellphones.

Ride-Sharing Upstarts Challenge Taxi Industry

Companies like Uber are continually confronting entrenched government bureaucracy and resistant unions of taxi drivers and dispatchers.

Fresh Face Is Leading England to Glory at Ashes

Joe Cook is just 22, but he is already a batter who is striking fear into the hearts of Australian players and fans.

Mickelson's Victory Reignites Rivalry With Woods

Phil Mickelson has won two majors since Tiger Woods claimed his last one, and Mickelson now has surpassed Rory McIlroy for No. 2 in the world rankings.
On Golf

Emotional Victory for Mickelson's Caddie of 21 Years

After Phil Mickelson's British Open victory, the only full-time caddie he has ever had, Jim Mackay, showed even more emotion than he did.

Ohio Man Charged With Murder in Deaths of 3 Women

Three bodies wrapped in plastic bags were found over the weekend in East Cleveland, and the police chief said the investigation was "nowhere near done."

A.C.L.U. Urges Inquiries in Shooting of Man Tied to Boston Suspect

The A.C.L.U. said the public had little faith in the F.B.I.'s ability to investigate itself in the shooting death of Ibragim Todashev, who admitted killing three people with Tamerlan Tsarnaev in 2011.

In Climbing Income Ladder, Location Matters

The odds of rising to another income level are notably low in certain cities, like Atlanta and Charlotte, and much higher in New York and Boston.
Opinionator | The Stone

Nothing to See Here: Demoting the Uncertainty Principle

Let's put an end to the misuse of quantum physics to validate outlandish metaphysical claims.
Op-Ed Columnist

New York Is Not Detroit. But ...

This city, too, has made promises that will be hard to keep.
Op-Ed Columnist

Detroit, the New Greece

Don't let the deficit scolds hijack the discussion this time.


Regulators find an investment house not too big to prosecute for 'spoof' trades

High-Frequency Trading Firm Panther Energy Fined in 'Spoofing' Case
By Dina El Boghdady
Washington Post
Monday, July 22, 2013

A high-speed trading firm in New Jersey and its owner agreed to pay $2.8 million to settle federal charges that they used a disruptive market trading practice that was banned by Congress when it passed a major financial overhaul measure three years ago.

The Commodity Futures Trading Commission announced the deal Monday with Panther Energy Trading and Michael J. Coscia, who allegedly used sophisticated computer algorithms to illegally place and quickly cancel bids, a method known as "spoofing." The CFTC action, which awaits court approval, marks the first time that federal authorities have used an enforcement tool granted them by the 2010 Dodd-Frank financial regulation law, which banned spoofing.

The use of complex algorithms to make trades in the blink of an eye has come to dominate the market, attracting scrutiny from regulators in this country and abroad. The Securities and Exchange Commission and the CFTC have been studying the practices employed for these high-frequency traders. Last week the Financial Industry Regulatory Authority sent letters to nearly a dozen such trading firms, asking for details on the controls they use to keep algorithms from malfunctioning.
Panther and Coscia agreed to pay a $1.4 million fine, return $1.4 million in ill-gotten gains and stop trading for a year as part of the settlement, but they did not admit to wrongdoing. Neither party could be immediately reached for comment.

The CFTC alleges that for nearly three months in 2011, Panther would place a small order to sell futures. It would then place large orders to buy those futures at high prices, giving the impression to the market at large that there was big demand. But the firm would then quickly cancel its buy orders as soon as it sold the contracts it wanted to sell.

"The sequence would quickly repeat, but in reverse," the CFTC said.

CFTC Commissioner Bart Chilton said in a statement that Panther was trying to "fake out" other traders and that he wanted a longer ban on trading for the company and its owner.

"Spoofing sends false signals to markets in order to lure prey and game the system," said Chilton, who coined the term "cheetah" to describe high-frequency traders. "With ultra-fast cheetah technology, false market signals take places within milliseconds. The good news is that regulators around the world are starting to catch up with the cheetah traders and we are shutting them down when they violate the law."

In a related matter, Britain's Financial Conduct Authority imposed a $900,000 penalty as part of an enforcement action against Coscia, the CFTC said.

The CFTC alleges that Panther and Coscia engaged in the illegal activity while trading 18 futures contracts -- including natural gas, corn, and soybeans -- on four exchanges owned by CME Group.

The CFTC said CME also has imposed an $800,000 fine and ordered the return of $1.3 million in ill-gotten gains from Panther and Coscia.

FT is sure that new gold exchange in South Korea will flop

South Korea's New Gold Trading Platform May Lack Sparkle
By Song Jung-a
Financial Times, London
Monday, July 22, 2013

To much fanfare South Korea has announced it plans to set up a gold exchange in 2014 -- but analysts warned that it might be poorly timed, given weak demand for bullion amid the global economic slowdown.

The country's financial watchdog said on Monday that spot gold will be traded on its main bourse from early next year as the government is keen to boost transparency of gold trades and root out shady deals used for tax evasion.

The gold exchange will be set up in the first quarter so that individuals as well as institutional investors can trade bullion in the open market as they do stocks, the Financial Supervisory Commission said. It also added that local authorities would strengthen the clampdown on illegal deals through tougher tax probes.

Government officials have pointed to gold buying as one of the most common ways used for tax evasion. About 100-110 tonnes of gold are traded in South Korea each year but more than half of the transactions are made illegally to avoid paying a 10 per cent value-added tax, the FSC said.

The move comes after the country's new president, Park Geun-hye, promised to strengthen tax collection through regularisation of the informal sector to boost welfare spending. Park promised to implement $119 billion of social spending over the next five years, without increasing public debt or most tax rates.

Government officials believe that the illegal gold trade could increase further as business leaders try to hide assets. Local authorities have strengthened their corporate tax probes since Park came to power in late February. The authorities said in May they had launched a probe into 23 companies and individuals suspected of tax evasion through shell companies in tax havens.

To encourage participation of individual investors, the trading units of gold will be as small as 1-10 grammes while 1kg of gold bar will be used for physical delivery, the FSC said. And the 3 per cent import tariff will be exempted on the gold traded on the exchange, it added.

Stocks, bonds, and financial derivatives are traded on the Korea Exchange. Although the country has a vibrant derivatives market for stock futures and options, the trading volume for gold futures remains very low.

Analysts were sceptical about the prospects of the gold exchange, saying it is an ill-timed plan. "Investor sentiment toward gold remains extremely weak, as no one expects gold price to go up any time soon," said Suh Ji-young, a researcher at Daishin Economic Research Institute. "Initial trading volume will be very low, although demand could recover in two to three years once the global economy recovers."

The precious metal dropped nearly 30 per cent from the start of the year to a low of $1,180 a troy ounce last month amid low inflation and the dollar's strength, although it has rebounded more than 10 per cent since to above $1,317 a troy ounce as fears of a rapid exit from monetary stimulus by the Federal Reserve eased.

Suh also noted that regularisation of gold trade could actually reduce demand for the metal. "For many of the buyers, tax evasion was one of the biggest merits because gold allowed them to hoard wealth without paying taxes. Now that the merit is gone, demand will likely be reduced," she said.

Treasuries not safe enough as pace of foreign purchases slows

By Daniel Kruger and Liz Capo McCormick
Bloomberg News
Monday, July 22, 2013

Foreign investors, the bulwark of the U.S. government bond market as it more than doubled in size during the financial crisis, are adding Treasuries at the slowest pace since 2006 amid the worst rout in four years.

Holdings by non-U.S. investors rose 1.9 percent through May, down from 5.2 percent a year ago data last week show, as foreigners owned less than 50 percent of Treasuries outstanding for the first time since March 2012. Overseas central banks cut the amount of bonds held for them by the Federal Reserve during the second quarter. The Bloomberg U.S. Treasury Bond Index fell 2.4 percent, the most since 2009, after Chairman Ben S. Bernanke said he might slow asset purchases as the economy improves.

 Diminished demand comes as institutions recalculate their expectations for yields. International buyers had kept pace as the market expanded to $11.4 trillion from $4.4 trillion in 2007, supporting President Barack Obama's efforts to end the longest recession since the 1930s. The biggest sellers this year are from the Caribbean, the domicile for hundreds of hedge funds that are typically first to react to changes in interest-rate policies.

"If foreign central banks are not an incremental buyer of new Treasuries and the Fed is 'going to taper, if,' then the Treasury will have to find another source" of demand, Thomas Atteberry, a Los Angeles-based fund manager at First Pacific Advisors Inc., which manages $24 billion in total assets, said in a July 18 telephone interview. "And that source wants a higher return to commit their money."
First Pacific only owns Treasuries that mature in a maximum of six months, he said.

International holdings of U.S. government debt fell $45.8 billion, or 0.8 percent, in April and May to $5.678 trillion, or 49.8 percent of bonds outstanding, based on Treasury (BUSY) Department data released last week. The two-month decline was the first since 2005.

Finance officials in developing countries that were trying to depress the value of their currencies to boost exports reversed course in order to prevent too steep a drop, Ira Jersey, an interest-rate strategist at Credit Suisse Group AG in New York, said in a July 16 telephone interview. The firm is one of the 21 primary dealers that are obligated to bid at the Treasury's debt auctions.

"This period when the Fed appears to be transitioning to normalization of interest rates is of course a challenge to reserve managers who need to hold dollars for fundamental reasons," Philippine central bank Governor Amando Tetangco said in an e-mail response to questions July 18. The nation increased its holdings 0.5 percent to $39.5 billion in May from $39.3 billion the previous month.
The biggest exception was China, the largest foreign owner. The nation boosted its stake this year by $95.5 billion, or 7.8 percent, to $1.316 trillion, the most on record. The world's second biggest economy has added U.S. bonds in seven of the last eight months, buying $25.2 billion in May as the benchmark 10-year yield rose to 2.17 percent, then the highest level since April 2012.

Central bank sales probably were "far more significant in June," and helped push two-year note yields to as high as 0.43 percent on June 26 from as low as 0.19 percent in May, Sebastien Galy, a senior foreign-exchange strategist in New York at Societe Generale SA, France's largest bank, said in a telephone interview on July 16.

Yields for the benchmark 10-year Treasury note fell 10 basis points, or 0.10 percentage point, last week, to 2.49 percent, as the 1.75 percent note due May 2023 rose 26/32, or $8.13 per $1,000 face value, to 93 20/32. The yield dropped one basis point to 2.47 percent as of 12:12 p.m. in New York.
The 10-year yield reached 2.75 percent on July 8, the highest since August 2011, from a low this year of 1.61 percent on May 1. The selloff escalated after Bernanke, following the completion of a two-day meeting of the Federal Open Market Committee on June 19, said the Fed might scale back its $85 billion a month of bond buying this year and end it by mid-2014.

"Our Japanese customers, who have been tremendous buyers of Treasuries, stepped back because they don't like to stop the falling knife," Thomas Roth, a senior Treasury trader in New York at Mitsubishi UFJ Securities USA Inc., a unit of Japan's biggest lender, said in a telephone interview July 18.

Yields have since dropped to as low as 2.46 percent on July 17, after Bernanke told the House Financial Services Committee that if economic "data are stronger than we expect, we'll move more quickly" to reduce purchases. If the numbers "don't meet the kinds of expectations we have about where the economy's going, then we would delay that process or potentially increase purchases for a time," he said.

Fed Benchmarks

Policy makers have said they won't raise benchmark interest rates, which they have kept in a range of zero to 0.25 percent since 2008, until unemployment falls below 6.5 percent while the inflation rate remains under 2.5 percent.

"There's optimism about the U.S. economy," Michael Pond, the head of global inflation-linked research at Barclays Plc, another primary dealer, said in a July 15 telephone interview. On recent trips to Asia, foreign officials "were hesitant, but wanted to put on bearish positions" in Treasuries to reflect that, he said.

U.S. employers added 195,000 workers for the second straight month in June and wages increased as the world's largest economy gained momentum, while the jobless rate held close to a four-year low at 7.6 percent.

Fund Outflows

The unemployment benchmark might be reached by the end of next year, based on estimated growth in gross domestic product of 3 percent to 3.5 percent in 2014, according to the FOMC's June central tendency estimates, which are higher than the 2.9 percent estimate of private forecasters in a Bloomberg survey. GDP expanded at a 1.8 percent pace in the first quarter.

The improving outlook came as Hong Kong reduced its holdings of U.S. government securities by 6 percent to $137.8 billion, Singapore also cut 6 percent to $92.2 billion and Thailand slashed its total by 20 percent to $54.6 billion since March, Treasury data show.

Private investors joined the retreat, pulling about $8.1 billion from mutual funds that invest in bonds during the week through July 10, according to data from the Washington-based Investment Company Institute released July 17. Assets flowed out of the funds for six straight weeks, the longest stretch since December 2008, and totaled $74.8 billion. Customers added $4.55 billion to U.S. equity funds during the period, ending seven consecutive weeks of withdrawals.

No Value

"With yields as low as they were, and clearly the Fed suppressing them below what their fundamental value would be, people didn't see value in the Treasury market," Thomas Higgins, a global macro strategist in Boston at Standish Mellon Asset Management Company LLC, said in a telephone interview on July 18. The debt management group of Bank of New York Mellon has $167 billion of fixed-income assets.

Measures of projected bond market volatility show that investors are becoming less concerned that yields will change abruptly. The Bank of America Merrill Lynch MOVE index dipped to a seven-week low of 77.45 on July 18 from 117.89 on July 5, its highest level since December 2010.
Deutsche Bank AG Co-Chief Executive Officer Anshu Jain praised the Fed for fostering a "slow, smooth" adjustment in the bond market as it plans to curtail debt purchases. The central bank should be happy with how the bond market has reacted, Jain said July 17 in a Bloomberg Television interview.

Yields on 10-year Treasuries will rise this year to 2.63 percent, based on the median of 67 estimates in a Bloomberg survey.

The Fed pumped more than $3 trillion into the financial system through bond purchases since 2008. It held a record $1.96 trillion of Treasuries on July 17, up $300 billion, or 18 percent, from the end of 2012. Foreign purchases totaled $104.6 billion through May, a 1.9 percent increase. International investors had raised U.S. bond holdings by more than 10 percent each year since 2006.

Treasury holdings by Caribbean nations fell $30.9 billion, or 10.9 percent, in May to $253.2 billion, the biggest drop for any country or group.

"American hedge funds domiciled in Greenwich, Connecticut, that have their nameplates in the Cayman Islands were huge sellers of Treasuries in May," Jim Bianco, president of Bianco Research LLC in Chicago, said in a July 17 telephone interview. Hedge funds, many of which are registered in the Caribbean, "move a lot of faster than everybody else," he said.

Foreign central banks reduced custody holdings at the Fed to $2.94 trillion as of July 17, the least since Feb. 6 and the fifth consecutive weekly reduction. They owned $2.97 trillion on June 12.

"There is a shift occurring with a kind of leveling out of Treasury purchases," Michael Brandes, global head of fixed-income strategy for Citigroup Inc.'s Citi Private Bank, with $270 billion in assets under management, said in a July 18 interview. "We are coming to an inflection point in the U.S. rate cycle with the trend for higher yields."

DealBook P.M. Edition July 22, 2013: Activist Investor to Step Down From Yahoo Board

Monday, July 22, 2013
Activist Investor to Step Down From Yahoo Board Daniel S. Loeb, whose campaign to change Yahoo culminated in the appointment last year of Marissa Mayer as the company's chief executive, is resigning from the board.
For the latest updates, go to »

Dell's Buyout Fate Still Hinges Mostly on Icahn Just two days from Dell's new deadline for counting votes on its founder's proposed buyout, the company's fate appears to rest firmly in the hands of the activist investor Carl C. Icahn and his ally, Southeastern Asset Management, as well as the mutual-fund manager T. Rowe Price.
KPN Says It Is Looking for a Buyer of Its German Mobile-Phone Unit KPN confirmed that it was in talks on the sale of its mobile operations in Germany, though it would not elaborate on who the buyer may be.
Deutsche Bank Hints It Would Take Steps to Reduce Risks If Deutsche Bank does announce a plan to reduce its assets, it would probably do so on July 30, when it discloses second-quarter earnings.
China Insider: Signs That a Financial Overhaul May Be in the Works Beijing is taking incremental, but symbolic, steps toward financial reform, says Bill Bishop.
In Debt: Detroit Blazes a Path It Never Wanted Unlike other municipal debtors that have overextended themselves or made poor financial choices, Detroit is in much deeper trouble. Its trip through bankruptcy will be in uncharted territory, says Stephen J. Lubben.
White Collar Watch: A Long Slog for SAC's Cohen Although the Securities and Exchange Commission is not pursuing insider trading charges against the hedge fund manager Steve A. Cohen, he still faces the possibility that criminal charges will one day be filed against him, says Peter J. Henning.
High-Speed Trading Firm Is Fined and Barred The Commodity Futures Trading Commission said on Monday that it had fined Panther Energy Trading $2.4 million for trying to manipulate futures contract prices. It was also barred from trading for a year.
Extended Stay America Aims to Go Public Extended Stay, a hotel chain owned by three investment firms, filed on Monday for an initial public offering. The I.P.O. would be the latest deal to test investors' willingness to bet on a recovery in real estate.
UBS Reaches Settlement on Mortgage Securities The big Swiss bank said it had reached an agreement in principle with the Federal Finance Housing Agency to settle claims related to mortgage-backed securities issued between 2004 and 2007.
Corporate Earnings Companies scheduled to report results on Tuesday include Apple and AT&T.
In the United States On Tuesday, Senate subcommittee will hold a hearing on whether financial firms like Goldman Sachs and Morgan Stanley should continue to be allowed to store metal, operate mines and ship oil.
Overseas On Tuesday, HSBC is to release its preliminary purchasing managers' index for Chinese manufacturing.

S&P 500 climbs to record close, its 23rd this year: Wall Street at Close Report July 22, 2013.

S&P 500 climbs to record close, its 23rd this year

By Kate Gibson, MarketWatch 
NEW YORK (MarketWatch)U.S. stocks posted modest gains on Monday, with the S&P 500 notching its 23rd record close this year, as the financial and health-care sectors led the market higher.

The S&P 500 index SPX +0.20%  added 3.44 points, or 0.2%, to end at 1,695.53, rising for a fourth straight session. The financial sector was the top gainer and energy was the top decliner among its 10 major sectors. 

The Nasdaq Composite Index COMP +0.36%  rose 12.77 points, or 0.4%, to 3,600.39. 

U.S. growth outlook hurt by faltering sales
Paul Vigna and Ben Casselman discuss the state of the U.S. economy, and Rolfe Winker looks at Daniel Loeb's resignation from Yahoo's board. 

“I’m still in a neutral mode for the week. We should have a sideways week, but every time I thought that, we’ve gone slightly higher,” said Randy Frederick, managing director of active trading and derivatives at Charles Schwab. 

The Dow Jones Industrial Average DJIA +0.01%  gained 1.81 points to 15,545.55, finishing slightly below its record close of 15,548.54 hit on July 18. 

Leading the Dow higher, Microsoft Corp. MSFT +1.94%  and Hewlett-Packard Co. HPQ +1.47%  rose 1.9% and 1.5%, respectively, 

Fast-food chain McDonald’s MCD -2.68%  led blue-chip declines, with its shares off 2.7% after the release of its second-quarter earnings. The company said its “results for the remainder of the year are expected to remain challenged.” 

McDonald’s is “a big component of the market because it’s a very big company; it’s the only real drag on the Dow today,” said Frederick, who noted that International Business Machines Corp.’s IBM +0.28%  rebound from its slide last week was helping to neutralize McDonald’s impact. IBM shares gained 0.3%. 

Yahoo Inc. YHOO -4.29% shares fell 4.3% on news that Dan Loeb of Third Point is stepping down from the board and unwinding a part of the hedge fund’s stake in the search engine. Read more on Monday movers.
More than 580 million shares traded on the New York Stock Exchange. Composite volume topped 2.7 billion, below the one-month average. 

Monday’s economic reports had existing-home sales falling 1.2% to 5.08 million in June. Economists polled by MarketWatch expected sales to have risen 1.9% last month to a seasonally adjusted rate of 5.28 million. 

“Despite the decline, this is still one of the strongest gains seen during the recovery,” noted Dan Greenhaus, chief global strategist at BTIG LLC, in emailed commentary. 

Stock-index futures on Monday offered little reaction to the Chicago Federal Reserve’s national activity index, which rose to negative 0.13 in June from negative 0.29 in May

The dollar DXY -0.50%  declined against the currencies of major U.S. trading partners including the yen USDJPY -0.12% , while the yield on the 10-year Treasury note 10_YEAR +0.04%   held steady at 2.493%.

The price of crude CLQ3 -1.25%  fell $1.14, or 1.1%, to settle at $106.91 a barrel on the New York Mercantile Exchange

The price of gold GCQ3 +3.23%  jumped 3.3% to $1,336 an ounce on the Comex, its biggest one-day gain in more than a year and its first close above $1,300 in almost five weeks. 

A Senate subcommittee hearing on Tuesday will begin to review a practice that allows deposit-taking banks to trade physical commodities, including oil and metal. The Federal Reserve is reconsidering exemptions that let lenders such as Goldman Sachs Group Inc. GS +1.15%  and J.P. Morgan Chase & Co. JPM +0.71%  store, transport and own physical assets such as oil and metal. Read how Goldman is in the spotlight for warehousing aluminum. 
The S&P 500 on Friday capped a fourth week of gains to close at an all-time high

“With the first major week of earnings behind us, a few things are quite clear. First, earnings are not coming in as badly as feared,” said Greenhaus of results from roughly 100 S&P 500 companies. 

Bloomberg  Image
A "for sale by owner" sign stands outside a home in LaSalle, Illinois, on June 7.
Dominated by financials, last week’s earnings reports were “almost all better than expected,” and as a result, “overall expected earnings growth for the S&P saw its first move higher in some time,” Greenhaus added. 

On Monday, Halliburton Co. HAL -1.64%  reported a drop in quarterly profit, with shares of the oil-field services company off 1.6%. 

Hasbro Inc. HAS +3.28% reported second-quarter results below expectations, hit by a sharp decline in the sale of toys for boys. Last week, competitor Mattel Inc. MAT -0.71%  reported a drop in second-quarter net income, which was dented by weakness in Barbie sales. 

Netflix Inc. NFLX -6.67% reported results after the close Monday.
On Tuesday, earnings from Apple Inc. AAPL +0.32%  are expected to throw some light on consumer-spending habits as its sales are driven by discretionary purchases. A lackluster earnings report from Microsoft Corp. MSFT +1.94%  last week sent its shares tumbling 11% on Friday, but they climbed 1.5% on Monday. 

Kate Gibson is a reporter for MarketWatch, based in New York.