Posted on May - 01 - 2010
Deals, Robust Data May Support Markets – RTTNews Daily Market Analysis
() - The major U.S. index futures are pointing to a higher opening on Monday, with the sentiment suggesting that traders may overlook the weakness in the rest of the global markets. The previous week’s declines may bring in some bargain hunters, who may focus on the positive personal income & outlays report, which showed that both income and spending climbed in line with expectations.
The mega-merger announced in the airline space should serve to allay some of the pessimism lurking in the minds over corporate profit growth. That said, other uncertainties such as the still fluid situation in Greece even after the European Union and the IMF doled out a massive financial aid, Goldman’s travails and the oil spill in the U.S. Gulf of Mexico region may still lead to indecision among traders. Traders may also look to the results of the Institute for Supply Management’s national manufacturing survey and the auto sales for direction.
U.S. stocks reversed course, declining for the week ended April 30th, as the sovereign debt crisis in Europe and its contagion effect along with concerns surrounding the revelation that Goldman had been accused of fraud kept sentiment subdued for most of the week. That said, the markets experienced volatility as they did display occasional brilliance in reaction to forecast-beating results by corporations.
Last Monday, the major averages finished on opposite sides on the unchanged line even as earnings remained encouraging and deal news trickled in. Caterpillar (CAT) propelled the Dow Industrials higher with a solid earnings report, while the Nasdaq Composite Index and the S&P 500 Index closed lower. Sovereign debt concerns ruled the roost on Tuesday, as the markets wilted under the selling pressure generated by S&P downgrading debt ratings of Greece and Portugal. The major averages closed notably lower in the session.
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