Led by news that Sanofi-Aventis (SNY) will buy retail health products firm Chattem (CHTT) for $1.9 billion and upgrades of key Dow components Intel (INTC) and Alcoa (AA) helped stocks kick off the short Christmas week with a bang.
Stocks soared right off the opening bell and held onto most of their gains through a somewhat listless session, though there was plenty of M&A news to keep participants interested. Besides Alcoa surging nearly 8% at the close, merger mania seems to have overtaken the health care sector, as pharma firms flush with cash seek to expand into the consumer market.
With the US senate voting to suspend debate on the health care bill, the major drug companies seem confident they have wrung the very best deal they could out of their congressional puppets. Many firms in the sector have been up sharply in recent days, including Dow components Merck (MRK) and Pfizer (PFE), considering the reform measure to be nothing more than bluster and Democratic party PR, void of substantive change. Thus, big pharma and health care providers will continue their rapacious plundering of the American people well into the next presidential cycle without a hitch.
Since US politics has been and continues to be largely held hostage by Wall Street, the pharmaceutical companies got whatever they wanted from a compliant Congress, meaning no real reform and no tax changes. It all adds up to business as usual for American medicine - the public pays, and if it can't, taxpayers foot the bill.
Dow 10,414.14, +85.25 (0.83%)
Nasdaq 2,237.66, +25.97 (1.17%)
S&P 500 1,114.05, +11.58 (1.05%)
NYSE Composite 7,147.15, +60.96 (0.86%)
Simple indicators affirmed the upside bias, suggesting further price appreciation for equities as advancing issues trumped decliners, 4503-2061, and new highs beat new lows, 499-94. Even though the dollar was higher against foreign currencies, stocks managed healthy gains, with all ten sectors advancing. Volume was slightly lower than normal, due to the closeness of the holidays, but not so poor as to suggest that traders were completely disinterested.
As the Dow and S&P were churning over ground already harvested, the NASDAQ broke out to new highs, as financial services and technology led the index higher. Amazon (AMZN), Google (GOOG) and Apple (AAPL) all posted strong gains.
NYSE Volume 4,531,713,500
Nasdaq Volume 1,837,347,875
The commodity complex was buffeted by the rising greenback. Oil slipped 89 cents, to $72.47. Gold fell dramatically, below the psychological $1100 level, down $15.50, to $1,096.00, in a continuation of the pull-back from all-time highs. Silver responded in like fashion, losing 28 cents, to $17.04.
With just three more days remaining in the shortened week (plus, Thursday will be a half-session), Tuesday's trade is likely to be more tempered as the third and final GDP estimate for the 3rd quarter is released at 8:30 am and existing home sales data for November will be announced at 10:00 am. At the same time on Wednesday, the National Association of Realtors (NAR) will release new home sales figures for November.
Monday, December 21, 2009
Thursday, December 17, 2009
Get Away Day on Strong Dollar, Options Expiration
As is usually the case, foreign markets reacted to Wednesday's Fed statement with more conviction and honesty than US media and economic pundits. Here in the USA, the widely-accepted response to the Fed was that the statement contained nothing new, and that money would continue flowing freely, courtesy of extraordinarily low interest rates fostered by Fed accommodation.
In the Far East, Asia and Europe, the response was vastly different and it had far-ranging effects on US equities. Most foreign currencies - especially the Euro, Pound Sterling and Yen - fell sharply against the US Dollar as leaders and market participants overseas saw the Fed announcement for what it really was: an early warning that accommodative policies would soon end. With the rise of the dollar, those enganged in the risk trade (shot the dollar, long stocks) on Wall Street were stung and forced into selling off a wide swath of positions, sending the markets to their worst one-day slide in over a month.
Contributing to the decline was options expiration on Friday, which raised volatility and exacerbated a descent which really needed little help. In the horse-racing business, they call day's like these "get-away days," as owners sell off unwanted or damaged horse flesh in claiming races or to private parties, raising cash for their next foray. So it was on Wall Street today, with investors exiting unwanted positions and trimming back on strong ones. Some, however, were selling everything to cover their short positions against the US Dollar.
Dow 10,308.26, -132.86 (1.27%)
Nasdaq 2,180.05, -26.86 (1.22%)
S&P 500 1,096.07, -13.11 (1.18%)
NYSE Composite 7,063.75, -117.02 (1.63%)
The decline was broad-based, with declining issues far outpacing advancers, 4851-1780. The relationship of new highs to new lows was flattened, with the highs at 227, to 73 lows. Volume, which was extraordinarily high on the NYSE, is indicating that the selling may only have begun, though there are still enough unhedged bulls about to keep declines in order.
NYSE Volume 6,782,270,000
Nasdaq Volume 1,928,465,625
Commodities were hard hit, as is the usual case with dollar strength. Oil dropped only a penny by the close, though it traded down as much as $1.40 during the day. Gold fell $29.00, to $1,107.20, while silver dipped 49 cents to $17.20.
In general, the day's trade was tied almost exclusively to dollar strength, a counter-trend trade that may have legs. The number of short positions in the dollar is immense, and if there are continuing signs that the US economy is improving rapidly - and there are some - the unwinding of these positions and the corresponding sell-off in stocks could be profound in a classic short-squeeze, likely engineered by a concerted effort by central banks with more at stake than equity positions.
The message may become all-too-clear if central banks work together to promote dollar stability and global strength: Stocks be dammed; whole economies are of far more importance. It's a dicey situation, though a correction may not exceed a 15% in equity values, not a bad haircut, but more of a trim after the robustness during the liquidity-driven rally of the past 9 months.
Overall, the markets are functioning well, and an unwinding of the short dollar - long stocks trade may be just the tonic needed to promote overall prosperity. Wall Street needs to give some heed to Main Street, which is still suffering.
There were a number of positive signs beyond the Fed announcement from Wednesday. After new unemployment claims disappointed with a 7,000 net rise from a week ago, to 480,000, the Philadelphia Fed Index reported a healthy rise, from 16.7 in November to 20.4 in December, and the Conference Board's Index of Leading Economic Indicators posted an increase of 0.9% for November, ahead of expectations (0.7%).
There is no economic data due out tomorrow and options traders must close positions by noon. There was a positive quarterly report by Research in Motion (RIMM) after the bell, which may provide some impetus to the upside in the tech space, though it appears that much of the trading for 2009 has concluded and new highs for the markets are unlikely until January.
In the Far East, Asia and Europe, the response was vastly different and it had far-ranging effects on US equities. Most foreign currencies - especially the Euro, Pound Sterling and Yen - fell sharply against the US Dollar as leaders and market participants overseas saw the Fed announcement for what it really was: an early warning that accommodative policies would soon end. With the rise of the dollar, those enganged in the risk trade (shot the dollar, long stocks) on Wall Street were stung and forced into selling off a wide swath of positions, sending the markets to their worst one-day slide in over a month.
Contributing to the decline was options expiration on Friday, which raised volatility and exacerbated a descent which really needed little help. In the horse-racing business, they call day's like these "get-away days," as owners sell off unwanted or damaged horse flesh in claiming races or to private parties, raising cash for their next foray. So it was on Wall Street today, with investors exiting unwanted positions and trimming back on strong ones. Some, however, were selling everything to cover their short positions against the US Dollar.
Dow 10,308.26, -132.86 (1.27%)
Nasdaq 2,180.05, -26.86 (1.22%)
S&P 500 1,096.07, -13.11 (1.18%)
NYSE Composite 7,063.75, -117.02 (1.63%)
The decline was broad-based, with declining issues far outpacing advancers, 4851-1780. The relationship of new highs to new lows was flattened, with the highs at 227, to 73 lows. Volume, which was extraordinarily high on the NYSE, is indicating that the selling may only have begun, though there are still enough unhedged bulls about to keep declines in order.
NYSE Volume 6,782,270,000
Nasdaq Volume 1,928,465,625
Commodities were hard hit, as is the usual case with dollar strength. Oil dropped only a penny by the close, though it traded down as much as $1.40 during the day. Gold fell $29.00, to $1,107.20, while silver dipped 49 cents to $17.20.
In general, the day's trade was tied almost exclusively to dollar strength, a counter-trend trade that may have legs. The number of short positions in the dollar is immense, and if there are continuing signs that the US economy is improving rapidly - and there are some - the unwinding of these positions and the corresponding sell-off in stocks could be profound in a classic short-squeeze, likely engineered by a concerted effort by central banks with more at stake than equity positions.
The message may become all-too-clear if central banks work together to promote dollar stability and global strength: Stocks be dammed; whole economies are of far more importance. It's a dicey situation, though a correction may not exceed a 15% in equity values, not a bad haircut, but more of a trim after the robustness during the liquidity-driven rally of the past 9 months.
Overall, the markets are functioning well, and an unwinding of the short dollar - long stocks trade may be just the tonic needed to promote overall prosperity. Wall Street needs to give some heed to Main Street, which is still suffering.
There were a number of positive signs beyond the Fed announcement from Wednesday. After new unemployment claims disappointed with a 7,000 net rise from a week ago, to 480,000, the Philadelphia Fed Index reported a healthy rise, from 16.7 in November to 20.4 in December, and the Conference Board's Index of Leading Economic Indicators posted an increase of 0.9% for November, ahead of expectations (0.7%).
There is no economic data due out tomorrow and options traders must close positions by noon. There was a positive quarterly report by Research in Motion (RIMM) after the bell, which may provide some impetus to the upside in the tech space, though it appears that much of the trading for 2009 has concluded and new highs for the markets are unlikely until January.
Wednesday, December 16, 2009
Early Rally Battered by Fed Rate Decision
Although there was no change in federal funds rates when the FOMC announced their decision at 2:15 pm on Wednesday, there was enough of an indication from the central bank committee that other aspects of their recent easy money policy were coming to an end. The statement which accompanied the "no change" decision was sprinkled with enough mention of the end of certain Fed programs and strengthening economic conditions to scare off year-end investors as the trading session ground to a close.
Even their opening sentence, "Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating, " was more bullish than previous announcements, a sign that the Fed would probably change the key wording: "exceptionally low levels of the federal funds rate for an extended period" within the next two meetings and that rate increases would be forthcoming by Summer of 2010.
The trick for traders is in the timing of their trades and the key at this particular time is to get out ahead of any Fed rate increase, because that event will almost certainly result in halting stocks' heady advance. As it is, the great rises in stocks has recently abated to a large degree, as trading since the last Fed meeting has been mostly sideways to slightly higher. Locking in gains or selling losers for the year would seem to be imminent following one of the last great market-moving events of the year.
With strong mention concerning the ending of certain liquidity programs, the Fed's last paragraph really set the tone for this meeting and what would occur in terms of policy in the first months of 2010.
With all of these programs coming to an end, the Fed obviously sees the US economy as essentially healed and will begin to focus more on reining in liquidity and keeping inflation under control. Most astute economy watchers believe that the Fed will begin to raise rates during the second quarter of 2010, if not sooner, and will increase them 25 to 50 basis points at a crack until the end of the year. By this time next year, the federal funds rate should be approaching 2% with 2 1/4% at the high end. That should certainly be accommodative enough to keep stocks from keeling over and low enough to not hamper economic growth.
As the market wound down, traders took the Fed's message to heart, trimming some of the day's earlier gains and actually sending the Dow to its second straight negative close. Other indices managed to hold onto marginal gains. The broader market, as measured by the NYSE composite, outperformed all other indices handily.
Dow 10,441.12, -10.88 (0.10%)
Nasdaq 2,206.91, +5.86 (0.27%)
S&P 500 1,109.18, +1.25 (0.11%)
NYSE Composite 7,180.76, +39.32 (0.55%)
Simple indicators were out of line with the modest headline numbers, most likely due to speculation on less-followed stocks as options expiration neared (Friday). As a matter of fact, much of the movement in stocks the past two days was more than likely unduly influenced by options, as Friday is a quadruple witching day. Advancing issues finished well ahead of decliners, 4089-2429. New highs outpaced new lows, 538-83. Volume was better than normal, another factor of options expiration at the end of the week.
NYSE Volume 5,370,022,500
Nasdaq Volume 2,037,267,500
Commodities responded to a weaker dollar prior to the Fed announcement, though the buck strengthened after the decision. Oil rose $1.97, to $72.66, though much of that gain was attributed to government figures showing a decline in inventory of 3.9 million barrels. Gold gained $13.00, to $1,136.00; silver was higher by 24 cents, to $17.70.
Other economic news included November CPI data which showed consumer prices increasing at a rate of 0.4%, in line with expectations. Housing starts and building permits were also up.
Looking ahead to Thursday, initial unemployment claims are expected to continue to moderate down to 450,000, though that number would, in normal times, be a cause for panic, considering it is the height of the retail season and jobs should be plentiful. Such a number indicates that the economy is not as yet fully healed, with jobs creation remaining extremely weak. Uncertainty of government measures, notably the health care debate and consideration of higher taxes, plus the overhang on business from last year's near financial meltdown, are contributing to slack demand for labor.
That should ease by Spring and Summer of 2010, but for now, the numbers are still quite discouraging, especially for those seeking employment.
Fed Chairman Ben Bernanke was named Time magazine's Person of the Year, which was probably more of a planned coincidence than happenstance. Bernanke is scheduled to be re-appointed for another term by the Senate tomorrow. Speaker of the House Nancy Pelosi was runner-up for the honor, which says plenty about the rigor of the selection committee.
Even their opening sentence, "Information received since the Federal Open Market Committee met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating, " was more bullish than previous announcements, a sign that the Fed would probably change the key wording: "exceptionally low levels of the federal funds rate for an extended period" within the next two meetings and that rate increases would be forthcoming by Summer of 2010.
The trick for traders is in the timing of their trades and the key at this particular time is to get out ahead of any Fed rate increase, because that event will almost certainly result in halting stocks' heady advance. As it is, the great rises in stocks has recently abated to a large degree, as trading since the last Fed meeting has been mostly sideways to slightly higher. Locking in gains or selling losers for the year would seem to be imminent following one of the last great market-moving events of the year.
With strong mention concerning the ending of certain liquidity programs, the Fed's last paragraph really set the tone for this meeting and what would occur in terms of policy in the first months of 2010.
In light of ongoing improvements in the functioning of financial markets, the Committee and the Board of Governors anticipate that most of the Federal Reserve’s special liquidity facilities will expire on February 1, 2010, consistent with the Federal Reserve’s announcement of June 25, 2009. These facilities include the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility. The Federal Reserve will also be working with its central bank counterparties to close its temporary liquidity swap arrangements by February 1. The Federal Reserve expects that amounts provided under the Term Auction Facility will continue to be scaled back in early 2010. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30, 2010, for loans backed by new-issue commercial mortgage-backed securities and March 31, 2010, for loans backed by all other types of collateral. The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth.
With all of these programs coming to an end, the Fed obviously sees the US economy as essentially healed and will begin to focus more on reining in liquidity and keeping inflation under control. Most astute economy watchers believe that the Fed will begin to raise rates during the second quarter of 2010, if not sooner, and will increase them 25 to 50 basis points at a crack until the end of the year. By this time next year, the federal funds rate should be approaching 2% with 2 1/4% at the high end. That should certainly be accommodative enough to keep stocks from keeling over and low enough to not hamper economic growth.
As the market wound down, traders took the Fed's message to heart, trimming some of the day's earlier gains and actually sending the Dow to its second straight negative close. Other indices managed to hold onto marginal gains. The broader market, as measured by the NYSE composite, outperformed all other indices handily.
Dow 10,441.12, -10.88 (0.10%)
Nasdaq 2,206.91, +5.86 (0.27%)
S&P 500 1,109.18, +1.25 (0.11%)
NYSE Composite 7,180.76, +39.32 (0.55%)
Simple indicators were out of line with the modest headline numbers, most likely due to speculation on less-followed stocks as options expiration neared (Friday). As a matter of fact, much of the movement in stocks the past two days was more than likely unduly influenced by options, as Friday is a quadruple witching day. Advancing issues finished well ahead of decliners, 4089-2429. New highs outpaced new lows, 538-83. Volume was better than normal, another factor of options expiration at the end of the week.
NYSE Volume 5,370,022,500
Nasdaq Volume 2,037,267,500
Commodities responded to a weaker dollar prior to the Fed announcement, though the buck strengthened after the decision. Oil rose $1.97, to $72.66, though much of that gain was attributed to government figures showing a decline in inventory of 3.9 million barrels. Gold gained $13.00, to $1,136.00; silver was higher by 24 cents, to $17.70.
Other economic news included November CPI data which showed consumer prices increasing at a rate of 0.4%, in line with expectations. Housing starts and building permits were also up.
Looking ahead to Thursday, initial unemployment claims are expected to continue to moderate down to 450,000, though that number would, in normal times, be a cause for panic, considering it is the height of the retail season and jobs should be plentiful. Such a number indicates that the economy is not as yet fully healed, with jobs creation remaining extremely weak. Uncertainty of government measures, notably the health care debate and consideration of higher taxes, plus the overhang on business from last year's near financial meltdown, are contributing to slack demand for labor.
That should ease by Spring and Summer of 2010, but for now, the numbers are still quite discouraging, especially for those seeking employment.
Fed Chairman Ben Bernanke was named Time magazine's Person of the Year, which was probably more of a planned coincidence than happenstance. Bernanke is scheduled to be re-appointed for another term by the Senate tomorrow. Speaker of the House Nancy Pelosi was runner-up for the honor, which says plenty about the rigor of the selection committee.
Tuesday, December 15, 2009
Ending String of Advances, Markets Lower Ahead of Fed
Was Monday the top?
A day after reaching 14-month highs, stocks trended lower on Tuesday on inflationary PPI data (+1.8%, more than double the predicted rise) and a strengthening US Dollar.
It was a confusing day fro traders in everything from stocks to currencies to commodities as markets moved in unusual directions in relation to each other. Oil managed to post its first gain after nine straight sessions in the red, while stocks broke a string of five straight winning sessions. Gold and silver fought against the flat line all day long.
Other economic news items sent mixed messages. The Empire State manufacturing index suffered a steep decline, dropping to a level of 2.55 in December after posting a figure of 23.51 in November. Nationally, capacity utilization continued to improve, up to 71.3% in November, following a reading of 70.6% in October.
Meanwhile, fears of more banking capitulation in Europe took on new meaning as Austria nationalized a major regional bank overnight.
Also weighing on the market was the issuance of more than $50 billion in new stock hitting the markets, stemming from the repayment of TARP funds by Bank of America, Citigroup and Wells Fargo. The idea that the market could sustain itself with so much new paper on the street without as much as a hiccup stoked the backs of the bulls. Shares of major banks, including Dow components JP Morgan Chase (JPM) and Bank of America (BAC) fell sharply during the session, however.
Struggling through most of the day in the red, the major indices slumped to intra-day lows in the final hour even though the losses were somewhat compromised by the release of comments from Fed Chairman Ben Bernanke with less than 15 minutes left in the trading day. Those comments, obviously timed to prevent a major sell-off prior to tomorrow's FOMC policy statement, cut the losses on the Dow by about 1/3. Nonetheless, stocks finished near the lows of the day with many investors seeking clarity on a range of issues from inflation to whether China would continue buying US treasuries.
Dow 10,452.00, -49.05 (0.47%)
NASDAQ 2,201.05, -11.05 (0.50%)
S&P 500 1,107.93, -6.18 (0.55%)
NYSE Composite 7,141.44, -45.05 (0.63%)
Market internals were clearly bearish. Losers beat winners, 3993-2529. New highs continued to outpace new lows, though by a margin less than Monday's extreme, 423-70.
NYSE Volume 5,604,492,500
NASDAQ Volume 1,921,278,875
Crude oil for January delivery was up $1.18, to $70.69. Gold lost $1.10, to $1,122.70, while silver gained 13 cents, to $17.47.
There was more than enough conflicting data and news to confound investors, and, if markets hate anything, it is uncertainty, of which there was an oversupply.
The avalanche of data will only worse on Wednesday, with November CPI, building permits, housing starts and the Treasury's current account balance on tap prior to the opening bell. Shortly after 2:00 pm, the Fed is expected to keep interest rates steady, though the statement wording will be closely watched for signs that the central bank may be considering raising rates.
It seems that the Fed has already tipped its hand concerning the all-important statement, not wanting to destroy the rally so close to Christmas. There's something to be said about Fed Chairman Bernanke: he definitely does not want to take away the punch bowl at the height of the party, but eventually that is what he will be forced to do. In the meantime, Treasuries have been rising over the past two months, which should serve as signal enough for investors that the top may already be in for stocks, or, at the very least, very close.
Wall Street has had a phenomenal year, considering how it began. Whether the markets will sustain themselves though the end of the year will be partially answered tomorrow after 2:00 pm.
A day after reaching 14-month highs, stocks trended lower on Tuesday on inflationary PPI data (+1.8%, more than double the predicted rise) and a strengthening US Dollar.
It was a confusing day fro traders in everything from stocks to currencies to commodities as markets moved in unusual directions in relation to each other. Oil managed to post its first gain after nine straight sessions in the red, while stocks broke a string of five straight winning sessions. Gold and silver fought against the flat line all day long.
Other economic news items sent mixed messages. The Empire State manufacturing index suffered a steep decline, dropping to a level of 2.55 in December after posting a figure of 23.51 in November. Nationally, capacity utilization continued to improve, up to 71.3% in November, following a reading of 70.6% in October.
Meanwhile, fears of more banking capitulation in Europe took on new meaning as Austria nationalized a major regional bank overnight.
Also weighing on the market was the issuance of more than $50 billion in new stock hitting the markets, stemming from the repayment of TARP funds by Bank of America, Citigroup and Wells Fargo. The idea that the market could sustain itself with so much new paper on the street without as much as a hiccup stoked the backs of the bulls. Shares of major banks, including Dow components JP Morgan Chase (JPM) and Bank of America (BAC) fell sharply during the session, however.
Struggling through most of the day in the red, the major indices slumped to intra-day lows in the final hour even though the losses were somewhat compromised by the release of comments from Fed Chairman Ben Bernanke with less than 15 minutes left in the trading day. Those comments, obviously timed to prevent a major sell-off prior to tomorrow's FOMC policy statement, cut the losses on the Dow by about 1/3. Nonetheless, stocks finished near the lows of the day with many investors seeking clarity on a range of issues from inflation to whether China would continue buying US treasuries.
Dow 10,452.00, -49.05 (0.47%)
NASDAQ 2,201.05, -11.05 (0.50%)
S&P 500 1,107.93, -6.18 (0.55%)
NYSE Composite 7,141.44, -45.05 (0.63%)
Market internals were clearly bearish. Losers beat winners, 3993-2529. New highs continued to outpace new lows, though by a margin less than Monday's extreme, 423-70.
NYSE Volume 5,604,492,500
NASDAQ Volume 1,921,278,875
Crude oil for January delivery was up $1.18, to $70.69. Gold lost $1.10, to $1,122.70, while silver gained 13 cents, to $17.47.
There was more than enough conflicting data and news to confound investors, and, if markets hate anything, it is uncertainty, of which there was an oversupply.
The avalanche of data will only worse on Wednesday, with November CPI, building permits, housing starts and the Treasury's current account balance on tap prior to the opening bell. Shortly after 2:00 pm, the Fed is expected to keep interest rates steady, though the statement wording will be closely watched for signs that the central bank may be considering raising rates.
It seems that the Fed has already tipped its hand concerning the all-important statement, not wanting to destroy the rally so close to Christmas. There's something to be said about Fed Chairman Bernanke: he definitely does not want to take away the punch bowl at the height of the party, but eventually that is what he will be forced to do. In the meantime, Treasuries have been rising over the past two months, which should serve as signal enough for investors that the top may already be in for stocks, or, at the very least, very close.
Wall Street has had a phenomenal year, considering how it began. Whether the markets will sustain themselves though the end of the year will be partially answered tomorrow after 2:00 pm.
Monday, December 14, 2009
Higher Hurdles for Stocks
With a dozen trading days left in the year, stocks pushed ahead to 14-month highs on Monday. Though the markets were relatively calm, there seemed to be an absence of both fear and sellers, especially after the government of Abu Dhabi rescued the failing ventures in neighboring Dubai with $10 billion in emergency assistance, as $3 billion in notes came due today.
The Middle East bailout spurred more dollar weakness, which translated into higher stock prices on the US exchanges. The Dow, in particular, lagged the other indices due to a pre-market announcement of oil conglomerate ExxonMobil's (XOM) $41 billion bid to purchase XTO Energy (XTO), primarily for it's natural gas business. The all-stock deal pushed shares of XOM down more than 4% on the session. Of the 30 Dow stocks, XOM was easily the biggest loser, as 25 stocks posted gains.
All of the major indices made year-to-date and 12-14-month highs, including the Dow Transportation Index, which confirmed the move in the Dow. Despite stocks breaking out to new highs, there was no lack of appetite for stock buyers and no sellers anywhere in sight. The Dow has closed higher six of the past seven sessions. Market sentiment is about as bullish as it can get.
Dow 10,501.05, +29.55 (0.28%)
NASDAQ 2,212.10, +21.79 (0.99%)
S&P 500 1,114.11, +7.70 (0.70%)
NYSE Composite 7,186.49, +61.37 (0.86%
Simple indicators were decidedly one-sided, as advancers trounced decliners, 4689-1868. New highs led new lows, 509-70, despite low volume and end-of-year tax issues.
NYSE Volume 5,059,216,500
NASDAQ Volume 1,855,139,750
Oil fell for the 9th day in a row, losing 36 cents, to $69.51. The metals were slightly on the upside, with gold higher by $3.80, to $1,123.80, and silver gaining 25 cents, to $17.34.
There was barely any concern over the upcoming Fed announcement on Wednesday. Traders are convinced that the Fed will do nothing in terms of rate policy though there are rumblings that some of the critical wording in their accompanying statement may begin to indicate a less accommodative stance.
Looking over the economic horizon, the week is full of reports, including PPI, Capacity Utilization and Industrial Production on Tuesday, and CPI, Housing Starts and Current Account Balance all due on Wednesday in advance of the Fed statement.
Unless those economic reports are dazzlers or the Fed changes some of the crucial wording (especially the term "extended period" in relation to how long they expect to keep rates low) in their statement, it looks like smooth sailing for stocks through the end of the year. It's difficult to argue that point being that 2009 will go down in market history as one of the best ever for stocks.
Although some analysts say that stocks are pricey right now, it doesn't seem to be bothering those still participating in one of the market's greatest bull rallies.
The Middle East bailout spurred more dollar weakness, which translated into higher stock prices on the US exchanges. The Dow, in particular, lagged the other indices due to a pre-market announcement of oil conglomerate ExxonMobil's (XOM) $41 billion bid to purchase XTO Energy (XTO), primarily for it's natural gas business. The all-stock deal pushed shares of XOM down more than 4% on the session. Of the 30 Dow stocks, XOM was easily the biggest loser, as 25 stocks posted gains.
All of the major indices made year-to-date and 12-14-month highs, including the Dow Transportation Index, which confirmed the move in the Dow. Despite stocks breaking out to new highs, there was no lack of appetite for stock buyers and no sellers anywhere in sight. The Dow has closed higher six of the past seven sessions. Market sentiment is about as bullish as it can get.
Dow 10,501.05, +29.55 (0.28%)
NASDAQ 2,212.10, +21.79 (0.99%)
S&P 500 1,114.11, +7.70 (0.70%)
NYSE Composite 7,186.49, +61.37 (0.86%
Simple indicators were decidedly one-sided, as advancers trounced decliners, 4689-1868. New highs led new lows, 509-70, despite low volume and end-of-year tax issues.
NYSE Volume 5,059,216,500
NASDAQ Volume 1,855,139,750
Oil fell for the 9th day in a row, losing 36 cents, to $69.51. The metals were slightly on the upside, with gold higher by $3.80, to $1,123.80, and silver gaining 25 cents, to $17.34.
There was barely any concern over the upcoming Fed announcement on Wednesday. Traders are convinced that the Fed will do nothing in terms of rate policy though there are rumblings that some of the critical wording in their accompanying statement may begin to indicate a less accommodative stance.
Looking over the economic horizon, the week is full of reports, including PPI, Capacity Utilization and Industrial Production on Tuesday, and CPI, Housing Starts and Current Account Balance all due on Wednesday in advance of the Fed statement.
Unless those economic reports are dazzlers or the Fed changes some of the crucial wording (especially the term "extended period" in relation to how long they expect to keep rates low) in their statement, it looks like smooth sailing for stocks through the end of the year. It's difficult to argue that point being that 2009 will go down in market history as one of the best ever for stocks.
Although some analysts say that stocks are pricey right now, it doesn't seem to be bothering those still participating in one of the market's greatest bull rallies.
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