Posted on September - 30 - 2010
Positive Data Sets Market On Track For Rebound – RTTNews Daily Market Analysis
() - The major U.S. index futures are pointing to a higher opening on Friday, with sentiment improving further after the government released a report, which showed a bigger than expected increase in personal income and personal spending. With optimism improving following the release some positive domestic and overseas economic data, the prices of commodities have turned higher. If the Institute for Supply Management’s manufacturing survey produces better-than-expected or in line results, the markets may build on the buoyancy.
U.S. stocks could not sustain early momentum built on the back of some encouraging reports and closed Thursday’s session modestly lower. The major averages opened moderately higher after the U.S. GDP and jobless claims data alleviated some anxiety. However, the indexes turned lower after an initial spurt, moving below the unchanged line by early afternoon trading. Thereafter, the major averages moved roughly sideways below the unchanged line to close on a weak note.
The Dow Industrials fell 47.23 points or 0.44% to close at 10,788, while the Nasdaq Composite Index closed down 7.94 points or 0.33% at 2,369 and the S&P 500 Index ended 3.53 points or 0.31% lower at 1,141.
Twenty-one of the thirty Dow components closed the session lower, with Pfizer (PFE), Kraft Foods (KFT), Hewlett-Packard (HPQ), Caterpillar (CAT) and American Express (AXP) posting notable losses.
Among the sector indexes, the NYSE Arca Computer Hardware Index slipped 1.35% and the NYSE Arca Internet Index fell 1.17%.
On the economic front, the ISM-Chicago reported that its index of manufacturing activity in the Mid-western region unexpectedly rose to 60.4 in September from 56.7 in August. The new orders index rose 6.4 points to 61.4 and the production index increased about 7 points to 64.3. On the other hand, the backlog orders index declined 7 points to 49.1, dropping below the ’50′ level for the first time since November 2009, while the employment index fell by 2.1 points to 53.4.
Initial claims for unemployment benefits fell to 453,000 in the week ended September 25th from 469,000 in the previous week. The four-week moving average, which smoothens the fluctuations, declined to 458,000 from 464,000. Meanwhile, continuing claims declined by 83,000 to 4.46 million and extended benefits fell by 294,000.
The revised second quarter GDP report showed that the U.S. economy rose at an upwardly revised 1.7% sequential rate, with the revision coming about due to slightly stronger than expected consumer spending growth and a bigger than expected inventory build. However, investment spending was downwardly revised and net trade also served as a bigger drag on growth than initially estimated.
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