Posted on December - 22 - 2010
Lack Of Clear Direction From Data May Lead To Indecision
() - The major U.S. index futures are pointing to a lower opening on Thursday, with economic data unlikely to provide further clarity in thin pre-holiday trade. The details of the durable goods orders released earlier in the day were mixed. Although the headline order growth fell by more than expected in November, a key measure of capital spending rebounded. The jobless claims came just about in line with expectations.
Deal news continues to trickle in, offering some encouragement. Commodity prices are seeing some weakness, with oil retreating from about a 2-year high and other risky bets like the euro are also moving to the downside. The market course is now likely to depend on the consumer sentiment and the new home sales reports to be released shortly after the markets open.
After seeing some volatility in the morning, U.S. stocks shed their inhibitions and remained mostly above the unchanged line in afternoon trading, closing modestly higher.
Amid the release of a report showing a smaller than expected upward revision to third quarter GDP growth, the major averages moved in a small range back and forth across the unchanged line in the morning before optimism concerning the economic recovery took over.
Subsequently, the averages advanced till the afternoon only to retreat once again, with the Nasdaq Composite even falling below the unchanged line in mid-afternoon trading. Buying interest that emerged thereafter helped the averages gain some ground and they were seen consolidating their modest gains for the rest of the session.
The Dow Industrials added 26.33 points or 0.23% to close at 11,560 and the Nasdaq Composite Index closed up 3.87 points or 0.15% at 2,682, while the S&P 500 Index ended 4.24 points or 0.34% higher at 1,259.
Twenty-two of the Dow components closed higher, with Alcoa (AA), Bank of America (BAC), Disney (DIS), General Electric (GE), JP Morgan Chase (JPM) and Pfizer (PFE) showing notable gains. On the other hand, Hewlett-Packard (HPQ), Intel (INTC) and American Express (AXP) receded sharply.
Among the sector indexes, the NYSE Arca added 1%, the NYSE Arca Disk Drive Index advanced 1.19%, the Philadelphia Housing Sector Index rose 1.11% and the KBW Bank Index rallied 1.91%. However, the NYSE Arca Airline Index fell 1.18% and the NYSE Arca Gold Bugs Index receded 1.08%.
On the economic front, a report released by the National Association of Realtors showed that existing home sales came in at a seasonally adjusted annual rate of 4.68 million units in November, with sales now at their highest level since June. Nevertheless, the data trailed the consensus estimate of 4.75 million units. Distressed sales made up 33% of sales. Inventories as measured in terms of months of sales fell to 9.5 months from 10.5 months in October.
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