Posted on December - 08 - 2010
Strong Data Points May Help Markets Hold Ground
() - The major U.S. index futures are pointing to a higher opening on Thursday, with sentiment getting a lift from positive data points from Asia and domestically. Earlier in the day, Japan reported an upward revision to its third quarter growth and Australia released strong jobs numbers. Added to the optimism, the U.S. Labor Department reported a bigger than expected decline in jobless claims.
Stray corporate pre-announcements trickling in are suggesting that corporate profit growth may continue to remain strong. The prices of commodities are moving back to the upside, deriving strength from the positive data points despite the dollar trading in a mixed fashion.
U.S. stocks ended a listless session on Wednesday modestly higher, as the markets showed a lack of direction amid a lack of any major catalysts and the strengthening of the dollar. The major averages opened higher but were unable to sustain an initial upward. The Dow subsequently bounced back and forth across the unchanged line before closing up 13.32 points or 0.12% at 11,373.
After showing volatility till the afternoon, the S&P 500 Index moved decisively into positive territory and showed sideways movement thereafter to close up 4.53 points or 0.37% at 1,228. The Nasdaq Composite Index was mostly higher, barring a mid-morning collapse, ending up 10.67 points or 0.41% at 11,328. The S&P 500 set a more than two-year closing high, while the Nasdaq set a nearly three-year closing high.
Nineteen of the thirty Dow components closed higher, with financials leading the way. Bank of America (BAC) climbed 3.72%, American Express (AXP) gained 1.90% and JP Morgan Chase (JPM) rallied 2.57%. Other notable gainers included Home Depot (HD), which raised its 2010 guidance, Travelers Co. (TRV), Microsoft (MSFT), Kraft Foods (KFT), Intel (INTC) and Hewlett-Packard (HPQ). On the other hand, Boeing (BA) fell 1.59%, United Technologies (UTX) lost 1.08% and McDonald’s (MCD) declined about 2% after reporting weak November global same store sales.
Among the sector indexes, the NYSE Arca Broker/Dealer Index rose 1.18% and the KBW Bank Index rallied 2.95%. Meanwhile, the NYSE Arca Airline Index slipped 1.07%, the Dow Jones U.S. Basic Materials Average fell 1.10% and the NYSE Arca Gold Bugs Index slumped 2.25%. In the technology space, the Philadelphia Semiconductor Index and the NYSE Arca Disk Drive Index gained about 1% each.
Currency, Commodity Markets
Crude oil futures are moving up $0.52 to $88.80 a barrel after receding $0.41 to $88.28 a barrel on Wednesday. Gold futures are currently rising $4 to $1,387.20 an ounce. In the previous session, the precious metal declined $25.80 to $1,383.20 an ounce.
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