Posted on June - 29 - 2011
Greek Relief May Continue To Support Markets
– The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment reflecting optimism stemming from the relief that Greece will avoid a default. Although the passage of the vote to adopt austerity measures is just the first in a series of steps the beleaguered nation has to take, it is definitely a good move forward.
A report released earlier in the day showed that jobless claims fell by less than expected-a cause of concern amid the setback seen in the labor market in recent weeks. The markets may also focus on the results of a regional manufacturing report to be released later in the day.
U.S. stocks rose for a third straight session on Wednesday, encouraged by the ratification of a crucial austerity plan by the Greek parliament and fairly positive pending home sales data. Commodity and financial stocks helped to leas the markets higher.
The Dow Industrials rose 72.73 points or 0.60 percent before closing up 12,261 and the S&P 500 Index ended up 10.74 points or 0.83 percent at 1,307, closing above the 1,300 level for the first time since early this month. Meanwhile, the Nasdaq Composite Index closed at 2,741, a gain of 11.18 points or 0.41 percent.
Twenty-four of the thirty Dow components closed higher, with American Express (AXP), Bank of America (BAC) and JP Morgan Chase (JPM) all rising over 2 percent.
Among the sector indexes, the Dow Jones U.S. Basic Materials Average rose 1.29 percent, the NYSE Arca Oil Index added 1.39 percent, the Philadelphia Oil Service Index moved up 1.81 percent and the NYSE Arca Gold Bugs Index gained 2.11 percent. Additionally, the NYSE Arca Securities Broker/Dealer Index advanced 2.27 percent and the KBW Bank Index rose 2.38 percent, while the NYSE Arca Internet Index added 1.87 percent.
With Wednesday’s advance, the Dow Industrials is at a nearly 1-month high, closing firmly above its 21-day MA (12,082) and closing in on its 50-day MA (12,370). Further above the 50-day MA, the index has resistance around the 12,401 and 12,752 levels. On the downside, the index has support around 11,953 level and its 200-day MA (11,802).
On the economic front, the National Association of Realtors reported that pending home sales rose 8.2 percent month-over-month in May, way ahead of expectations for a 2 percent increase. Sales rose in all four regions.
Currency, Commodity Markets
Crude oil futures are rising $0.32 to $95.09 a barrel after advancing $1.88 to $94.77 a barrel on Wednesday. Yesterday’s gain came amid the passage of the Greek austerity bill that improved risk appetite and the release of the weekly oil inventory report. The report showed that crude oil stockpiles fell by 4.4 million barrels to 359.5 million barrels in the week ended June 24th. Despite the decline, inventories remained above the upper limit of the average range.
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