Posted on September - 25 - 2010
Capital Good Order Growth May Alleviate Anxiety – RTTNews Daily Market Analysis
() - The major U.S. index futures are pointing to a higher opening on Friday, with sentiment rebounding after the Commerce Department’s durable goods orders report showed an increase in durable goods orders, excluding transportation orders. The data should allay some fears concerning the faith of companies in the economic recovery. If the new home sales data also do not disappoint, then there is every likelihood that the markets can rebound and post a modest gain. However, given the fact that markets are still at overbought levels following their recent gains, substantial upside from current levels is unlikely.
U.S. stocks extended their losses on Thursday, as disappointing jobless claims data and some soft private sector readings from across the Atlantic stirred up economic worries once again. Stung by these lackluster reports, the major U.S. averages opened sharply lower, although they pared much of their losses by early afternoon trading.
While the Dow Industrials and the S&P 500 Index held close to the unchanged line until late trading, the Nasdaq Composite traded comfortably above the unchanged line.However, all three of the averages eventually succumbed to selling pressure and pulled back sharply to close moderately lower.
The Dow Industrials finished 76.89 points or 0.72% lower at 10,662 and the S&P 500 Index ended down 9.45 points or 3.2% at 1,125, while the Nasdaq Composite Index lost 7.47 points or 0.32% before ending at 2,327.
Twenty-six of the thirty Dow components closed lower, with American Express (AXP), Bank of America (BAC), Disney (DIS), General Electric (GE) and JP Morgan Chase (JPM) among the notable decliners. On the other hand, Hewlett-Packard (HPQ) gained more than 1.50%.
Among the sector indexes, the Dow Jones Transportation Average fell 1.90%, the KBW Bank Index receded 1.86%, the NYSE Arca Securities Broker/Dealer Index slid 1.18% and the Philadelphia Housing Sector Index declined 1.96%. The Philadelphia Oil Service Index, the NYSE Arca Oil Index, the Dow Jones U.S. Basic Materials Average, the Dow Jones Utility Average and the NYSE Arca Gold Bugs Index all fell close to 1%.
On the economic front, the Labor Department said jobless claims rose 12,000 to 465,000 in the week ended September 18th. At the same time, continuing claims for the week ended September 11th fell 48,000 to 4.49 million. However, extended benefits past 26 weeks rose by a net 208,000.
The National Association of Realtors’ existing home sales report showed that existing home sales rose7.6% month-over-month to 4.13 million units in August from 3.84 million units in July. The increase was mainly due to a bounce in single-family home sales, which came in at a seasonally adjusted annual rate of 3.62 million units. Inventories as measured by months of supply fell to 11.6 from 12.5, while the median price of an existing home fell 0.8% year-over-year to $178,600.
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