Posted on April - 26 - 2011
Fed Decision In Focus As Overbought Markerts Look For Additional Catalysts
- The major U.S. index futures are pointing to a higher opening on Wednesday, with sentiment likely to remain guarded ahead of the FOMC decision and the post-meeting press briefing. Earnings continue to be mixed, while an economic report released earlier in the day showed a bigger than expected increase in durable goods orders. A key measure of capital spending also saw a substantial increase. In any event, the recent run up does not present much opportunity for a strong move to the upside unless the Federal Reserve announces something radical to allay economic concerns.
After opening Tuesday’s session on a nervous note, U.S. stocks advanced steadily till the afternoon and consolidated thereafter. Mostly positive earnings along with an upbeat consumer confidence reading gave a boost to the markets even as concerns began to resurface following the release of lackluster earnings from a few notable companies, including Netflix (NFLX) and Coca-Cola (KO).
The Dow Industrials ended up 115.49 points or 0.93 percent at 12,595, its highest closing level since June 5th, 2008, and the S&P 500 Index added 11.99 points or 0.90 percent before ending at 1,347, its highest closing level since June 17th, 2008. Meanwhile, the Nasdaq Composite closed at a more than a 3-year high of 2,848, up 21.66 points or 0.77 percent.
Twenty-four of the thirty Dow components closed higher, with Caterpillar (CAT), Intel (INTC), Cisco Systems (CSCO), Merck & Co. (MRK) and Microsoft (MSFT) leading the gains. On the other hand, Coca-Cola, Bank of America (BAC) and Home Depot (HD) retreated notably.
Among the sector indexes, the NYSE Arca Airline Index rose 2.58 percent, the NYSE Arca Biotechnology Index added 1.37 percent, the Dow Jones Utility Average moved up 1.03 percent and the Dow Jones Transportation Average advanced 1.85 percent. In the technology space, the Philadelphia Semiconductor Index rose 1.59 percent. Meanwhile, the NYSE Arca Gold Bugs Index slid 1.08 percent and the NYSE Arca Computer Hardware Index lost 1.10 percent.
On the economic front, the Conference Board said its consumer confidence index rose 1.6 points to 65.4 in April, with confidence improving to its second highest level since early 2008. The present situation index rose 2.1 points to 39.6, while the expectations index edged up 1.3 points to 82.6.
The S&P/Case-Shiller house price survey showed that its 20-city house price index fell 0.2 month-over-month in March and was down 3.3 percent annually, marking the biggest drop since November 2009.
Currency, Commodity Markets
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