Posted on January - 20 - 2011
Return Of Risk Appetite May Aid Stocks
- The major U.S. index futures are pointing to a higher opening on Friday, with the equity markets likely to get a lift from an increase in risk appetite following lackluster performances in the past couple of sessions. Positive earnings from companies such as General Electric (GE) and search engine Google (GOOG) should remove doubts concerning the sustainability of corporate profit growth.
Crude oil and gold prices are showing modest weakness, while most metal prices have firmed up. The euro is trading at an 8-week high against the greenback in reaction to positive economic data released from the euro zone region. In the absence of any major data from the U.S., gravitation towards the risky asset classes may lead to buying of stocks.
U.S. stocks declined for the second straight session on Thursday, as the overbought levels of the markets made traders wary despite a better than expected jobless claims report and some positive earnings.
The major averages opened lower and spent the better of the session below the unchanged line before closing lower. The Dow Industrials ended down merely 2.49 points or 0.02% at 11,823, while the S&P 500 Index fell 1.66 points or 0.13% to close at 1,280 and the Nasdaq Composite Index declined 21.07 points or 0.77% before ending at 2,704.
However, the market breadth among the Dow components was positive, with sixteen stocks closing higher, while fourteen stocks ended in the red. Dupont (DD) and Caterpillar (CAT) were among the worst decliners, while Bank of America (BAC), Home Depot (HD), Hewlett-Packard (HPQ) and JP Morgan Chase (JPM) rose notably.
Among the sector indexes, the NYSE Arca Disk Drive Index declined 2.23% and the NYSE Arca Networking Index lost 2.40%, while, the Dow Jones Transportation Average, the Philadelphia Semiconductor Index, the NYSE Arca Oil Index and the NYSE Arca Airline Index slid about 1% each. Additionally, the NYSE Arca Gold Bugs Index fell 1.45%. Meanwhile, the NYSE Arca Broker/Dealer Index added 1.14%.
On the economic front, the Labor Department revealed that first time claims for unemployment benefits fell to 404,000 in the week ended January 15th from 441,000 reported in the previous week. The four-week average declined to 412,000 from 416,000, while continuing claims declined by 26,000 to their lowest level since October 2008.
The National Association of Realtors reported that existing home sales came in at a seasonally adjusted annual rate of 5.28 million units, up 12.8% month-over-month, with all four regions and categories of homes seeing monthly growth. Distressed sales accounted for 36% of the sales. The median price of an existing home declined 1% year-over-year, while existing home inventories slid to 8.1 months of supply from 9.5 months in November.
Similar Posts:
- Positive Data Sets Market On Track For Rebound – RTTNews Daily Market Analysis
- Earnings Optimism May Be Tempered By Profit Taking
- Capital Good Order Growth May Alleviate Anxiety – RTTNews Daily Market Analysis
- Job Gains May Alleviate Some Of Trader Anxiety – RTTNews Daily Market Analysis
- Markets May Sustain Momentum On Data, Corporate News
