Posted on Saturday, 5th February 2011 by Charlotte W
- The major U.S. index futures are pointing to a higher opening on Monday, with sentiment getting a lift from M&A announcements. Additionally, traders are fairly encouraged by corporate earnings and the abatement of the political unrest in Egypt. In reaction, commodity prices are gaining ground, which is likely to be positive for the markets. In the absence of major economic catalysts and with the employment report past us, the markets may attempt to hold on to its recent buying momentum.
U.S. stocks rebounded in the week ended February 4th, as a string of positive economic readings, the continuing inflow of solid corporate earnings and a rally in most base metal prices helped traders to overlook geopolitical concerns and a lack of clarity regarding the economic outlook. Technology and commodity stocks led from the front with strong advances.
The major averages closed Monday’s session moderately higher following the release of two separate reports that showed that manufacturing activity in the Mid-western region remained on solid footing and that U.S. consumer activity continued to be fairly buoyant. The major averages advanced with even more verve on Tuesday after the Institute for Supply Management’s national manufacturing survey confirmed the acceleration in the pace of expansion in the manufacturing sector. Solid auto sales reported by carmakers also lent support. The Dow Industrials closed above 12,000 for the first time since mid-2008.
However, uncertainties returned to haunt traders on Wednesday despite the release of a private payrolls report that showed solid additions to payrolls in January. The overbought levels of the markets may have turned the focus to the political crisis that has left Egypt paralyzed.
With the service sector survey of the ISM and the jobless claims data providing encouragement on Thursday, stocks rose modestly, although amid some volatility. Despite showing some indecision on Friday in reaction to the Labor Department’s non-farm payroll employment report, which painted a mixed picture, stocks closed modestly higher.
For the week, the Dow Industrials added 2.27% and the S&P 500 Index rose 2.71%, while the Nasdaq Composite ended up 3.07%.
Among the sector indexes, the Philadelphia Semiconductor Index added 5.59%, the KBW Bank Index rose 3.3%, the NYSE Arca Airline Index moved up 3.56%, the Philadelphia Oil Service Index gained 3.12% and the NYSE Arca Oil Index advanced 2.57%. However, the NYSE Arca Airline Index fell 2.66%.
Currency, Commodity Markets
Crude oil futures are moving down $0.49 to $88.54 a barrel after edging down $0.31 or 0.35% to $89.03 a barrel in the week ended February 4th. The commodity started last week on solid footing, rising close to $3-a-barrel on Monday, propelled by strong manufacturing and consumer spending data.
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Tags: Earnings, Earnings May
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