Posted on Tuesday, 21st June 2011 by Charlotte W
– The major U.S. index futures are pointing to a lower opening on Wednesday, with the strong rally in the previous session likely to introduce some caution among traders. The Fed announcement and the post-meeting press briefing due for today could also keep traders on the sidelines. The central bank’s monetary policy setting arm is expected to maintain its monetary policy stance and also adhere to its schedule of winding up the QE II program.
Although talks of a third round of stimulus measure has been doing the rounds, it is likely that the Fed comments on any such move, given the recent resurgence in inflationary pressure and the transient nature of the factors that have slowed growth.
Lifted by hopes that the Greek government would survive the confidence motion, U.S. stocks advanced solidly on Tuesday. The major averages opened modestly higher and rose through the morning despite the release of weak housing data. Thereafter, the indexes moved roughly sideways to close notably higher.
The Dow Industrials added 109.63 points or 0.91 percent before closing up at 12,190, while the Nasdaq Composite outperformed with a 57.60 point or 2.19 percent gain to 2,687. Meanwhile, the S&P 500 Index closed at 1,296, an advance of 17.16 points or 1.34 percent.
Twenty-six of the thirty Dow components closed higher, with Alcoa (AA) (up 3.99 percent), Caterpillar (CAT) (up 3.27 percent), Bank of America (BAC) (up 2.17 percent), Cisco Systems (CSCO) (up 2.44 percent) and DuPont (DD) (up 2.64 percent) leading the way higher.
Among the sector indexes, the Dow Jones U.S. Basic Materials Average rose 3.15 percent, the NYSE Arca Oil Index gained 2.23 percent, the Philadelphia Oil Service Index advanced 1.83 percent and the NYSE Arca Gold Bugs Index added 3.37 percent. Additionally, the Philadelphia Housing Sector Index rose 2.08 percent compared to a 2.31 percent rally by the S&P Retail Index.
In the tech space, the Philadelphia Semiconductor Index moved up 2.54 percent, the NYSE Arca Computer Hardware Index rose 2.01 percent, the NYSE Arca Networking Index surged up 3.04 percent, the NYSE Arca Internet Index advanced 3.25 percent and the NYSE Arca Software Index rose about 2 percent.
On the economic front, the National Association of Realtors reported that existing home sales fell to a seasonally adjusted annual rate of 4.81 million units in May from a downwardly revised reading of 5 million for April. Both single and condominium/co-ops sales declined.
Inventories measured in terms of months of supply rose to 9.3 months in May from 9 months in April, while in terms of absolute numbers, inventories fell by 39,000. Distressed sales accounted for 31 percent of sales in May compared to 37 percent in April, while the median price of an existing home fell 4.6 percent month-over-month.
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