Posted on May - 22 - 2011
Markets May Sustain Momentum On Data, Corporate News
- The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment improving further following the jobless claims report, which showed a decline in claims. The data along with some positive earnings and LinkedIn’s listing may help the markets strengthen the optimism it has been building in the recent sessions. A regional manufacturing survey and existing home sales data to be released shortly after the markets open could also influence sentiment.
If the momentum continues through the release of the rest of the data due for today, the averages could hold support around their 21-day moving averages. European markets are staging a remarkable rally, while the Asian stocks had a mixed outing. Commodities prices are seeing consolidation amid flat trading in the dollar.
After showing some indecision in early trading on Wednesday, U.S. stocks advanced steadily till late afternoon trading. Thereafter, the averages moved sideways before closing moderately to notably higher. The turnaround in sentiment came as a rebound by commodities and some positive earnings allayed recent concerns.
The Dow Industrials ended up 80.60 points or 0.65 percent at 12,560 and the S&P 500 Index ended at 1,341, up 11.70 points or 0.88 percent. Meanwhile, the Nasdaq Composite added 31.70 points or 1.14 percent before closing at 2,815.
Twenty-three of the thirty Dow components closed higher, with Caterpillar (CAT) (up 3.11 percent), Chevron (CVX) (up 2.44 percent), Exxon Mobil (XOM) (up 1.65 percent) and DuPont (DD) (up 1.89 percent) advancing strongly. Meanwhile, Bank of America (BAC) and Hewlett-Packard (HPQ) slid notably.
Among the sector indexes, the Dow Jones U.S. Basic Materials Average rose 2.05 percent, the NYSE Arca Oil Index gained 1.34 percent and the Philadelphia Oil Service Index added 2.63 percent. Additionally, the Philadelphia Housing Sector Index advanced 1.47 percent, the Dow Jones Transportation Average added 1.61 percent, the NYSE Arca Securities Broker/Dealer Index moved up 1.51 percent and the NYSE Arca Biotechnology Index rose 1.24 percent.
In the technology space, the Philadelphia Semiconductor Index rallied 1.87 percent, the NYSE Arca Disk Drive Index jumped 3.02 percent, the NYSE Arca Networking Index added 1.46 percent and the NYSE Arca Internet Index gained 1.19 percent.
The major averages continued to be ensconced by their 21 and 50-day moving averages in the previous session. For the Dow Industrials, the key levels to watch for are 12,623 on the upside and 12,365 on the downside.
As expected, the minutes of the FOMC meeting did not reveal many surprises, given the fact that Federal Reserve Chairman Ben Bernanke discussed most of the issues in his post-meeting press briefing on April 27th. The minutes emphasized that the central bank thinks the recent rise in inflation is transitory. Meanwhile, growth is expected to accelerate later in the year after the slowdown in the first quarter. Nevertheless, the uptick is expected to be only limited. The Fed also foresees moderate growth in spending.
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