Posted on June - 29 - 2011
Passage Of Greek Vote May Bring Relief To Markets
– The major U.S. index futures are pointing to a higher opening on Wednesday, with markets cheering the Greek parliament’s passage of the bill to adopt austerity measures. This could remove some of the overhang surrounding Greece’s precarious fiscal situation. That said, the markets have been reacting to expectations of this in the past two sessions. Therefore, we could see some moderation in the buoyancy. The housing data to be released later in the session could also impact sentiment.
U.S. stocks advanced for a second straight day on Tuesday amid optimism concerning Greece successfully navigating through a crucial parliament vote to adopt austerity measures necessary for availing additional financing. Additionally, positive earnings from Nike (NKE), which solidified expectations for strong corporate profit growth, also encouraged traders.
The Dow Industrials added 145.13 points or 1.21 percent before closing at 12,189 and the Nasdaq Composite ended up 41.03 points or 1.53 percent at 2,729, while the S&P 500 Index closed at 1,297, a gain of 16.57 points or 1.29 percent.
Twenty-six of the Dow components closed higher, with Caterpillar (CAT) (up 3.02 percent), Exxon Mobil (XOM) (up 2.19 percent), Microsoft (MSFT) (up 2.38 percent), McDonald’s (MCD) (up 2.47 percent), Home Depot (HD) (up 2.44 percent) and Alcoa (AA) (up 2.42 percent) leading the gains.
Among the sector indexes, the NYSE Arca Biotechnology Index and the Dow Jones U.S. Basic Materials Average rose about 1.80 percent each. The NYSE Arca Oil Index gained 2.35 percent compared to a 3.77 percent jump by the Philadelphia Oil Service Index. In the tech space, the NYSE Arca Networking Index, the NYSE Arca Software Index, the NYSE Arca Disk Drive Index and the Philadelphia Semiconductor Index all rose over 1 percent.
With the rebound seen in the past two sessions, the Dow Industrials has climbed back above its 21-day MA (currently at 12,097). On the upside, resistances lie around 12,282, 12,368 (50-day MA) and 12,466. On the downside, the index has strong support around 11,913, the basing area of the recent consolidation phase.
On the economic front, the Conference Board reported that its consumer confidence index fell to a 7-month low of 58.5 in June from 61.7 in May, marking the second straight drop. The present situation index slid 1.7 points to 37.6, while the expectations index declined 4.3 points to 72.4. The individuals saying ‘jobs are hard to get’ rose 0.3 points, while those saying ‘jobs are plentiful’ fell 0.5 points.
The S&P/Case-Shiller house price survey for April showed that its 20-city composite house price index fell a seasonally adjusted 0.09 percent month-over-month in April. On an unadjusted basis, prices were up 0.66 percent. The annualized change in the house price index was a negative 3.95 percent.
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