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1421-1440 of 2099
DOW at last nite's close of 8848, had obviously broke above the neckline of the inverse H&S.
richtan ( Date: 20-Jul-2009 23:49) Posted:
DOW looks like breakout of the inverse H&S at about 8750 in the weekly chart:
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Stocks charge higher
Investors encouraged by quarterly results, a potential financing deal for troubled lender CIT. Dow rallies; Nasdaq, S&P 500 gain more than 1%.
By Catherine Clifford, CNNMoney.com staff writer
Last Updated: July 20, 2009: 6:53 PM ET
Wall Street also got a charge from reports that small business lender CIT has secured private-sector financing to keep it out of bankruptcy. Investors were encouraged to see that the financial sector can take care of itself, without government bailout funds.
The Dow Jones industrial average (INDU) jumped 104 points, or 1.2%. Monday's rally pushed the blue-chip index into positive territory (in 2009) for the first time in more than 5 weeks.
The broader S&P 500 (SPX) index added 11 points, or 1.1%, to close at its highest level in more than 8 months.
The tech-heavy Nasdaq composite (COMP) added 23 points, or about 1.2%, to stretch to its highest level since early October, or about 9 months.
The major indexes are coming off a positive week. Last week was the Dow and S&P 500's first up week -- and the Nasdaq's second -- in the past five.
The major force on Wall Street is second-quarter earnings.
"We have a very heavy earnings calendar, light economic news calendar," said Fred Dickson, chief market strategist at D.A. Davidson & Company. "The name of the game is earnings."
Companies have beat analysts' estimates by more than in other quarters, according to Ed Clissold, senior global analyst at Ned Davis Research, and that sentiment is supporting stocks Monday.
"The fact that companies haven't come out with the dire earnings that were seen in the first quarter is a positive sign," he said.
Betting on recovery: Wall Street is using the second-quarter financial reports to set expectations for the pace of the economic recovery.
Investors "are looking at incremental changes in the earnings reports to give them a clue as to how companies are positioned to rebound when the economy starts to pick up some forward momentum," said Dickson.
A report from Goldman Sachs (GS, Fortune 500) released Monday increased its 2009 target for the S&P 500 index to 1060 from 940, a 13% jump in the index.
The report also cautioned that "the U.S. economic backdrop represents the most significant risk to our equity market forecast," and that "the risk of a double-dip recession is significant." Stocks hit their recent lows on March 9 of this year and have been struggling higher.
Market breadth was positive. On the New York Stock Exchange, advancers beat decliners by 3 to 1 on a volume of 1.13 billion shares. On the Nasdaq, advancers beat out decliners by almost 5 to 1 on a volume of 2.08 billion shares.
Earnings for the week: This week, 145 of the S&P 500 companies, or 23% of the broad index, are due to report quarterly results. Among them, 12 Dow components, including American Express (AXP, Fortune 500), Microsoft (MSFT, Fortune 500), Coca-Cola (KO, Fortune 500) and Merck (MRK, Fortune 500), are set to release results.
Last week, a slew of major tech and finance companies reported either better-than-expected earnings or offered positive guidance: Intel (INTC, Fortune 500), IBM (IBM, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500), and Citigroup (C, Fortune 500).
"The mood of the market was lifted by the earnings surprises last week," said Dickson. Even though companies were posting weak year-over-year sales and profits, investors were focused on the fact that companies beat analyst expectations.
Texas Instruments (TXN, Fortune 500) reported earnings after the closing bell Monday. The chipmaker posted sales that fell 27% from the year ago period and net income that plunged 56% from the same quarter a year ago. Compared to the first quarter of 2009, however, sales and profits jumped.
CIT: The board of CIT (CIT, Fortune 500) has approved a deal for a $3 billion loan from bondholders in order to stave off a bankruptcy filing, according to published reports. The deal is expected to be announced later Monday.
The small and midsize business lender has been scrambling to raise money after the government said it would not provide it additional bailout funds. CIT received $2.3 billion in aid from the government late last year.
CIT (CIT, Fortune 500) shares had lost more than 80% since the beginning of June. On Monday, shares surged 79% to $1.25 per share.
The way that CIT's financial struggles have been managed have a positive impact on the market, according to Clissold.
"If you compare it to the chaos that surrounded Lehman and AIG, it shows you how far we have come," he said.
Economic reports: The index of leading economic indicators (LEI) rose 0.7% in June, according a report from the Conference Board. Economists polled by Briefing.com were expecting the index to have risen by 0.5% in June, according to a consensus estimate. LEI rose 1.2% in the previous month.
Bonds: Treasury prices bounced, with the yield on the benchmark 10-year note falling to 3.61% from 3.64% Friday. Treasury prices and yields move in opposite directions.
Other markets: In global trade, Asian stocks rallied on the reports about the CIT loan, with Hong Kong's Hang Seng index ending the day up 3.7%. Tokyo was closed for a holiday. European markets ended between 1% and 2% higher.
In currency trading, the dollar lost ground against the euro and British pound. Meanwhile, the greenback edged higher against the Japanese yen, which is considered another safe-haven currency.
U.S. light crude oil for August delivery settled up 42 cents to $63.98 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery rose $11.30 to $948.80 an ounce.
First Published: July 20, 2009: 9:36 AM ET
As climactic selling has obviously been pass, it is now more likely for the Dow to scale greater heights from here on...
Well done, Obama!...
DOW looks like breakout of the inverse H&S at about 8750 in the weekly chart:
US equity markets were stronger after Goldman Sachs said it believed the S&P 500 would enjoy its best second-half rally since 1982.
The investment bank boosted its forecast for the US benchmark index, predicting a 15 per cent jump from its closing level 919.32 on June 30, to 1,060 on December 31.
“Improvement in ex-financial earnings per share, stabilisation in profit margins and higher forward EPS guidance all point to a rising market through 2009,” said David Kostin at Goldman.
Meanwhile, markets were stronger after troubled lender CIT Group appeared to have secured financing and avoid bankruptcy.
Investors were awaiting an official announcement from the bank which lends to small and medium sized businesses, but it was reported that bondholders would supply it with $3bn in emergency funding.
”After a weekend where anything seemed possible for the firm – including Chapter 11 – it now has some breathing space to sort out its balance sheet and develop a viable business plan,” said Manoj Ladwa at ETX Capital.
Shares in CIT Group were up 91 per cent by late morning to $1.35.
Fears that a failure of
CIT would lead to a renewed bout of risk aversion led to a lacklustre performance from the major indices on Friday. Nevertheless, the Dow Jones Industrial Average was up 7.3 per cent on the week, while the S&P 500 rose 7 per cent, thanks to a number of stronger-than-expected earnings reports including those from
Goldman Sachs,
JPMorgan and
Intel.
On Monday, the Dow Jones Industrial Average was up 0.5 per cent to 8,783.01, while the S&P 500 added 0.4 per cent to 943.88.
Shares of
Yahoo, the internet company, eased 0.5 per cent to $16.76 after brokers at Jefferies & Co raised their price target to $20 from $19, saying the company’s long term prospects were good, particularly if it managed to strike a long-hoped for deal with software group Microsoft.
Johnson Controls was hit by the downturn in car manufacturing as the auto parts maker reported a 63 per cent drop in its third-quarter earnings. However, its profit of 25 cents a share was better than forecasts of 19 cents a share, and the stock jumped 5.3 per cent to $22.61.
Human Genome Sciences rocketed 207 per cent higher to $10.19 after it said its experimental treatment for lupus had been a success in late-stage trials.
Texas Instruments, the chipmaker, was among the companies reporting quarterly earnings on Monday. Ahead of its post-closing bell results the company’s shares were up 1.1 per cent to $23.27.
yes, just earn kopi $ from CIT Grp....
Apple and Microsoft results will propel..
so many good and wonderful news posted. Can see STI cheong all the way this week liao...
market pulse
Jul 20, 2009, 10:05 a.m. EST
U.S. June leading economic indicators up 0.7%
Alert Email Print By Greg Robb
WASHINGTON (MarketWatch) -- The U.S. index of leading economic indicators rose 0.7% in June, the Conference Board said Monday. This is the third straight monthly increase. The rise was slightly larger than the consensus forecast of Wall Street economists, who had expected a 0.5% rise. The gain is not as strong as the last two months. The index rose 1.0% in April and 1.3% in May. In the latest month, the coincident index fell 0.2%, while the lagging index fell 0.7%.
U.S. Stocks Climb, Sending S&P 500 to Highest Since November
By Matt Townsend
July 20 (Bloomberg) -- U.S. stocks rose, sending the Standard & Poor’s 500 Index above its highest close since November, as oil and metal prices climbed and speculation grew that
CIT Group Inc. will receive financing to avoid bankruptcy. Asian and European
shares gained, while Treasuries fell.
Alcoa Inc. and Exxon Mobil Corp. advanced at least 1.1 percent as copper rallied to a nine-month high and oil climbed for a fourth day. CIT Group jumped 89 percent as a person briefed on the board’s deliberations said the commercial lender may announce a financing agreement with bondholders.
Halliburton Co.,
Hasbro Inc. and
Eaton Corp. gained at least 3.2 percent after earnings beat analysts’ estimates.
The S&P 500 added 0.8 percent to 948.04 at 9:38 a.m. in New York. The Dow Jones Industrial Average jumped 66.58 points, or 0.8 percent, to 8,810.52, erasing its loss for the year. Europe’s Dow Jones Stoxx 600 Index added 1.4 percent and the MSCI Asia-Pacific Index increased 1.5 percent.
“Given the general weakness of the economy and concerns over corporate profitability going into the second quarter, reports to date have been a pleasant surprise,” said
Dean Gulis, part of a group that manages $2.5 billion for Loomis Sayles & Co. in Bloomfield Hills, Michigan. “This week it’s going to continue to rally. The worm has turned a little bit. People are feeling better about the economy.”
The S&P 500 jumped 7 percent last week as companies from
Goldman Sachs Group Inc. to Intel Corp. and Johnson & Johnson reported results that topped analysts’ estimates. The benchmark index has rebounded 40 percent from its 12-year low on March 9 amid speculation the economy is recovering.
Forecast Raised
Goldman Sachs boosted its forecast for the S&P 500, saying improving earnings will spur the steepest second-half rally since 1982. The bank’s year-end target for the S&P 500 was raised to 1,060, 15 percent above its level on June 30 and an increase from
David Kostin’s prior projection of 940.
A report today may show the gauge of leading economic indicators in the U.S. rose for a third straight month, according to a Bloomberg survey of economists. Companies including Microsoft Corp., Caterpillar and American Express Co. are scheduled to report earnings this week.
Earnings topped analysts’ estimates by an average of 15 percent for
S&P 500 companies that reported quarterly results since July 8, according to data compiled by Bloomberg, with 35 out of 43 beating estimates. Analysts forecast profits fell an average 33 percent in the second quarter and will decrease 20 percent from July through September, according to data compiled by Bloomberg.
Commodities Rally
Alcoa, the largest U.S. aluminum producer, rose 2.3 percent to $10.46, while Freeport-McMoRan Copper & Gold Inc., the biggest publicly traded copper producer, added 3.1 percent to $57.24.
Copper prices jumped 1.8 percent to a nine-month high in New York as rallying equity markets in Asia and Europe strengthened the outlook for metal demand. Gold, silver, aluminum zinc and tin also led a rally in metals.
Exxon, the largest U.S. oil company, increased 1.1 percent to $69.24 as crude climbed above $64 a barrel. BP Plc, Europe’s second-largest oil company, gained 1.7 percent.
The cheapest valuations in at least 14 years are making energy companies too alluring to pass up for UBS AG and Guggenheim Partners LLC, even though earnings in the industry may fall 48 percent this year. Oil and gas producers in the MSCI World Index traded at $7.84 per dollar of profit this month, less than half the average of $17.10 in the gauge of developed markets and the widest gap since at least 1995, data compiled by Bloomberg show.
CIT Group surged 89 percent to $1.32. The 101-year-old commercial-finance company seeking to ward off bankruptcy may announce an agreement for $3 billion in financing from bondholders as soon as today, said the person, who declined to be identified because the talks are confidential.
CIT needs time to strike deals with bondholders to reduce debt after the U.S. declined to give the firm a second bailout. The funds would give the New York-based company a chance to restructure its debt outside of bankruptcy, the person said.
To contact the reporter on this story:
Matt Townsend in New York at
mtownsend9@bloomberg.net.
Last Updated: July 20, 2009 09:43 EDT
S&P 500 to Post Biggest Gain Since 1982, Goldman Says (Update2)
By Sarah Jones and Roger Neill
July 20 (Bloomberg) -- Goldman Sachs Group Inc. boosted its forecast for the
Standard & Poor 500 Index, saying improving earnings will spur the steepest second-half rally since 1982.
The benchmark
index for U.S. stocks will advance 15 percent from its June 30 level to 1,060 on Dec. 31, an increase from
David Kostin’s prior projection of 940. The chief U.S. investment strategist at New York-based Goldman Sachs also lifted his 2009 and 2010 earnings estimates for S&P 500 companies to $52 and $75 a share, which are 30 percent and 19 percent higher than prior estimates.
Profits that
beat analysts’ forecasts at companies from New York-based
JPMorgan Chase & Co. to
Intel Corp. in Santa Clara, California, helped boost the S&P 500 by 7 percent last week, the biggest gain in four months. Since March 9, the gauge has rebounded 39 percent amid speculation the economy is recovering.
“Improvement in ex-financial earnings per share, stabilization in profit margins and higher forward EPS guidance all point to a rising
market through 2009,” Kostin wrote in a report today.
Kostin is now tied with Frankfurt-based Deutsche Bank AG’s
Binky Chadha for the second-highest S&P 500 forecast among 10 Wall Street strategists tracked by Bloomberg News. Only JPMorgan’s
Thomas Lee, at 1,100, is more bullish. Barclays Plc’s
Barry Knapp, who had been the most pessimistic U.S. strategist, boosted his projection a week ago following the 40 percent surge in the S&P 500 between March and June, the biggest gain since the 1930s.
Surprising Strength
Knapp raised his year-end target 23 percent to 930, saying he’d failed to foresee the size of the advance since the
S&P 500 fell to a 12-year low of 676.53 on March 9. His increase left
Kevin Gardiner of HSBC Holdings Plc and
Jason Todd of Morgan Stanley tied for the lowest S&P 500 projection at 900.
JPMorgan, the second-largest U.S. bank,
climbed 14 percent last week after saying profit rose for the first time since 2007 on record investment banking fees.
Intel, the biggest semiconductor company, added 17 percent after lifting its forecast for third-quarter revenue.
Financial institutions and technology makers have led the S&P 500’s gain since March 9, adding 95 percent and 52 percent.
The average year-end S&P 500 prediction among the 10 Wall Street strategists followed by Bloomberg News is now 997.
In an interview with Bloomberg Radio today,
Jim O’Neill, Goldman Sachs’s chief economist, said the U.S. may return to growth in the second half. He cited government data on employment as showing “we have probably seen the worst.”
The number of Americans filing claims for
unemployment benefits fell last week to the lowest level since January, depressed by shifts in the timing of auto plant shutdowns.
To contact the reporters on this story:
Sarah Jones in London at
sjones35@bloomberg.net;
Roger Neill in London at
rneill3@bloomberg.net.
Last Updated: July 20, 2009 08:44 EDT
European Stocks, U.S. Futures Advance; Shares in Asia Rally
By Daniela Silberstein
July 20 (Bloomberg) --
European stocks climbed for a sixth straight day, the longest stretch of gains in almost four months, as commodities prices increased. Asian shares and U.S. futures advanced.
BHP Billiton Ltd., the world’s largest mining company, rose 3 percent in London as copper rallied to a nine-month high. Lloyds Banking Group Plc gained 5.2 percent after a report the lender may report a first-half profit. CIT Group Inc. jumped 84 percent in Germany as a person briefed on the board’s deliberations said the 101-year-old commercial-finance company may announce a financing agreement.
The MSCI World Index advanced 0.6 percent as of 8:31 a.m. in London. The gauge of 23 developed nations surged 6.6 percent last week, the biggest rally in four months, after U.S. companies from Goldman Sachs Group Inc. to Johnson & Johnson reported earnings that beat analysts’ estimates.
Europe’s
Dow Jones Stoxx 600 Index added 0.9 percent. The MSCI Asia Pacific excluding Japan Index increased 2.8 percent, set to close at its highest level since September. Japan is closed for a holiday.
Standard & Poor’s 500 Index futures added 0.3 percent. A report that may show the gauge of leading indicators in the U.S. climbed for a third consecutive month, according to a Bloomberg survey of economists.
BHP, Rio Tinto
BHP Billiton gained 3 percent to 1,486 pence. Rio Tinto Group, the world’s third-largest mining company, climbed 2.9 percent to 2,217 pence. Copper in Shanghai increased for a fifth day, heading for the longest rally since March, on optimism demand for the metal will pick up as the global recession eases.
Peter Hambro Mining Plc increased 5.2 percent to 629.5 pence after the second-biggest producer of gold in Russia said first-half output gained 54 percent from a year earlier.
Lloyds advanced 5.2 percent to 71 pence. The bank whose largest shareholder is the British government may post a
profit for the first six months of the year after accounting rules allowed it to write back billions of pounds of sub-prime investments, the Sunday Times reported, without saying where it got the information.
British home sellers raised asking prices this month to meet increased demand from buyers, Rightmove Plc said. The average cost of a home rose 0.6 percent to 227,864 pounds ($372,000) after falling 0.4 percent in June, the operator of the U.K.’s biggest residential property Web site said today. Prices in London had the first annual gain of the year so far.
CIT Rallies
CIT Group surged 84 percent to $1.29. The 101-year-old commercial-finance company seeking to ward off bankruptcy may announce an agreement for $3 billion in financing from bondholders as soon as today, said the person, who declined to be identified because the talks are confidential.
CIT needs time to strike deals with bondholders to reduce debt after the U.S. declined to give the firm a second bailout. The funds would give the New York-based company a chance to restructure its debt outside of bankruptcy, the person said.
Total SA added 0.8 percent to 38.91 euros as crude oil rallied above $64 a barrel.
The cheapest valuations in at least 14 years are making oil companies too alluring to pass up for UBS AG and Guggenheim Partners LLC, even though earnings in the industry may fall 48 percent this year.
Oil and gas producers in the MSCI World traded at $7.84 per dollar of profit this month, less than half the average of $17.10 in the gauge of developed markets and the widest gap since at least 1995, data compiled by Bloomberg show. UBS, Guggenheim and Cohen & Steers Inc. are buying stocks from Exxon Mobil Corp. to Transocean Ltd. because an economic rebound will lift the industry after it generated at least 50 percent more profits than any other group in the past year.
To contact the reporter on this story:
Daniela Silberstein in Zurich at
dsilberstei2@bloomberg.net.
Last Updated: July 20, 2009 03:33 EDT
Home Resales, Leading Index Probably Rose: U.S. Economy Preview
By Shobhana Chandra
July 19 (Bloomberg) -- Home resales in the U.S. probably rose in June and a gauge of the economic outlook improved, signaling the recession may soon be over, economists said before reports this week.
Purchases of previously owned homes climbed to an annual rate of 4.83 million, the highest level since October, according to the median of 57 estimates in a Bloomberg survey before the National Association of Realtors’ report on July 23. Figures tomorrow may show the index of leading indicators climbed for a third consecutive month.
Mounting evidence that housing is stabilizing is bolstering forecasts that government stimulus efforts will gain traction in coming months and lift the economy from the worst slump in five decades. Other reports may show rising joblessness is weighing on Americans’ moods, tempering optimism about any rebound.
“The end of the recession could be pretty close,” said
Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “We’re getting near the bottom in housing. It’ll still be a very gradual recovery for the economy, with a labor market that’s very weak.”
Reports last week corroborated that the housing slump, now in its fourth year, is dissipating.
Housing starts unexpectedly jumped in June to the highest level since November as construction of single-family dwellings climbed by the most since 2004. Building permits, indicating future construction, rose the most in a year.
Signs of Stability
The National Association of Home Builders/Wells Fargo
index of builder confidence increased this month to the highest level since September.
One reason for the projected increase in home resales is that prospective buyers are taking advantage of the plunge in prices caused by the foreclosure crisis. Filings reached a record in the first half of 2009, according to RealtyTrac Inc., an Irvine, California-based seller of default data. More than 1.5 million properties got a default or auction notice or were seized by banks in the six months through June.
The New York-based Conference Board’s leading index, which points to the direction of the economy over the next three to six months, rose 0.5 percent last month after a 1.2 percent increase in May, according to the survey median.
The jump in building permits was probably one of the biggest contributors to the predicted gain in the leading index, economists said. Fewer
jobless claims and higher stock prices were also likely drivers.
Stocks Rise
Stocks have gained on optimism an economic recovery is at hand. The Standard & Poor’s
500 Index is up 39 percent since reaching a 12-year low on March 9.
A July 24 report may show the Reuters/University of Michigan final index of
consumer sentiment fell in July after four consecutive gains, economists predicted. A preliminary reading dropped to the lowest level since March.
The U.S. has lost about 6.5 million jobs since the recession began in December 2007. Economists in a separate survey taken by Bloomberg this month predicted the jobless rate will reach 10 percent by year-end from 9.5 percent in June.
Federal Reserve officials thought the economy was “still quite weak and vulnerable to further adverse shocks,” according to minutes of their June meeting released last week. Even so, the report also said “the economic contraction was slowing and that the decline in activity could cease before long.”
Companies seeing an improvement include
CSX Corp., the third-largest U.S. railroad. Jacksonville, Florida-based CSX reported second-quarter profit that topped analysts’ forecasts, and said demand for hauling most freight is stabilizing. Railroad traffic is considered an economic bellwether.
“We’re seeing pretty good stabilization in our markets,” Chief Executive Officer
Michael Ward said in an interview last week. “We don’t see any further deterioration, and we see some incremental improvement in the near future.”
Bloomberg Survey
================================================================
Release Period Prior Median
Indicator Date Value Forecast
================================================================
LEI MOM% 7/20 June 1.2% 0.5%
Initial Claims ,000’s 7/23 18-Jul 522 560
Cont. Claims ,000’s 7/23 11-Jul 6273 6390
Exist Homes Mlns 7/23 June 4.77 4.83
Exist Homes MOM% 7/23 June 2.4% 1.3%
U of Mich Conf. Index 7/24 July F 64.6 65.0
================================================================
To contact the reporter on this story:
Shobhana Chandra in Washington at
schandra1@bloomberg.net Last Updated: July 19, 2009 00:00 EDT
| Global equity technicals |
| Wave C has started? - by Nigel Foo |
| |
| The strong rebound of the US equity market over the past week caught us by surprise and probably negated our S&P500 head & shoulder formation. The S&P500 may have already completed its minor wave "b" consolidation at the end of last week and the wave "c" up leg may have just begun. If so, the index could hit 1,050. The Dollar Index looks technically weak, with the MACD and RSI technical indicators turning negative. We see one more down leg minor wave "v" to complete the minor wave "c". This would synchronise with our view that global equity markets could have just started their minor wave "c" upleg. We believe the performance of South Korea's Kospi could give us an idea where Asian markets are heading in the coming weeks. The index led Asia's rally since Mar and peaked in May, earlier than the other Asian equity markets. Kospi should be the first to start its minor wave "c". |
Market Snapshot
Jul 17, 2009, 4:50 p.m. EST
Bulls are back this week, market internals show
By Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- Stronger volumes during buying spurts than on selling action this week have some believing that, after four weeks of downside, the bulls are back in the market as earnings season starts in earnest.
The market advanced every day this week, giving a 7.3% gain to the Dow Jones Industrial Average, while the S&P 500 Index rose 7% and the Nasdaq Composite Index added 7.4%. The technology-heavy index also rose for its eighth consecutive session of gains.
Some technical analysts especially noted the strong action seen on Wednesday, as stocks rallied in the wake of Intel Corp. /quotes/comstock/15*!intc/quotes/nls/intc (INTC 18.79, +0.29, +1.57%) and its surprisingly good second-quarter earnings. See more on Intel results and stock action.
/quotes/comstock/10w!i:dji/delayed INDU 8,744, +32.12, +0.37%
8,800
8,600
8,400
8,200
8,000
A thus-far modest bounce "gained some of its mojo back with bulls showing they still have some juice -- i.e., buying power -- left," said Kevin Lane, chief market strategist at Fusion Investments.
"What gave us comfort in the advance was not as much the point gain but rather the internal skew," he wrote in a note, noting up volume topping down volume by a ratio of 27.3 to 1 on the New York Stock Exchange as well as market breadth among advancers vs. decliners.
On Wednesday, the Dow jumped 256 points, or 3%. But for Lane, that wasn't the most important aspect of the rally.
"As we always say, it's not the point gain that matters, but rather the sponsorship behind the move and the internals behind yesterday's were certainly akin to going into battle with a fully loaded battalion," he added.
The 1.3 billion shares traded on the NYSE on Wednesday were "a nice increase" -- up 40% from the previous session -- and were a strong improvement from the previous two weeks, according to Banyan Partners, an investment-advising firm.
Options expiration in play
The expiration of stock options on Friday, however, had other strategists take a more critical look at this past week's action. Traders have to cover bets ahead of those expirations and this tends to boost volume action.
"I'll take that and it's better than having lower volumes," said Barry Ritholtz, chief executive and chief market strategist at Fusion IQ. "I'm always careful when trying to interpret what's happening in the market."
On Friday, the market ended little changed for the most part, with the Dow industrials /quotes/comstock/10w!i:dji/delayed (INDU 8,744, +32.12, +0.37%) up 32 points at 8,743, while the S&P 500 /quotes/comstock/21z!i1:in\x (SPX 940.38, -0.36, -0.04%) dipped 0.4 points to 940 and the Nasdaq /quotes/comstock/10y!i:comp (COMP 1,887, +1.58, +0.08%) rose 1.6 points to 1,886.
The market still remains on track for a strong performance this week, ending a four-week losing streak that saw the broad S&P 500 lose 7% after failing to breach the 950 level.
"We were down for four weeks and were due for a bit of respite from the selling," Ritholtz commented.
However, the veteran strategist isn't convinced that earnings -- although many key companies that have reported so far for the June quarter beat expectations -- are convincing enough.
Bellwethers such as IBM Corp. /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 115.42, +4.78, +4.32%) and General Electric Co. /quotes/comstock/13*!ge/quotes/nls/ge (GE 11.65, -0.75, -6.05%) have topped expectations thanks to cost-cutting measures, not because of improving business conditions, Ritholtz said, noting that revenue actually missed expectations in the case of both companies.
"The market needs evidence of [economic] green shoots in earnings but that's not what we're seeing so far," the strategist added.
As for volumes, although this week showed a marked improvement, they've still remained well below the average recorded this year so far, according to Banyan Partners.
"The sellers haven't been completely removed," wrote Robert Pavlik, chief market strategist at the firm, in a note.
Although the 1.3 billion shares traded on Wednesday were a strong improvement, the level is "still far below the average daily volume on a year to date basis which is about 1.5 billion shares daily," he said. "So if we get some selling, we think that will likely help the market rally next week and it could take the S&P 500 back up to resistance at 950."
Nick Godt is a MarketWatch reporter based in New York.
Asian Stocks Record Best Week Since May on Recovery Speculation
By Darren Boey
July 18 (Bloomberg) -- Asian stocks rose this week, giving the MSCI Asia Pacific Index its biggest advance since May, amid renewed confidence the global economy is recovering.
CapitaLand Ltd., Singapore’s biggest developer, climbed 10 percent as Singapore upgraded its economic growth forecasts.
Alumina Ltd., partner in the world’s biggest producer of the material used to make aluminum, jumped 15 percent in Sydney as commodity prices climbed. Bank of Communications Co. gained 8.3 percent in Hong Kong as economist
Nouriel Roubini said the worst of the financial crisis is over.
“The recovery is gaining traction,” said
Nader Naeimi, a strategist at AMP Capital Investors in Sydney, which manages about $95 billion. “Even if we don’t see spectacular growth, a stabilization should be enough to support a market rally.”
The MSCI Asia Pacific Index added 2.7 percent to 103.38 this week. The gauge has rallied 47 percent from a five-year low on March 9 amid optimism stimulus policies around the world will revive the global economy. The
MSCI World Index gained 6.7 percent this week, the most since March.
Hong Kong’s Hang Seng Index climbed 6.2 percent, while Japan’s
Nikkei 225 Stock Average rose 1.2 percent. Indonesia’s
Jakarta Composite Index fell 0.6 percent yesterday, paring its weekly gain to 2.1 percent, after bomb blasts killed at least eight people in the city.
The MSCI Asia Pacific Index has risen
this week as government reports showed economic growth accelerated in China and U.S. manufacturing improved. Intel Corp. forecast sales that beat analyst estimates, while International Business Machines Corp. raised its profit forecast.
‘Gaining Momentum’
“Sentiment has been gaining momentum following positive economic and earnings news,” said
Michiya Tomita, who helps manage $61 billion at Mitsubishi UFJ Asset Management Co. in Hong Kong. “Most of the good news has been priced in. Investors will be looking for more catalysts in the next few weeks as companies report earnings.”
Stocks on the
MSCI Asia Pacific Index are trading at an average 43 times reported earnings, up from the 15 times shares were trading at during the market’s trough in March. Companies on the S&P 500 are currently at 14 times profit.
In Singapore, the Straits Times Index advanced 5.3 percent this week, after the trade ministry said the city’s gross domestic product will shrink between 4 percent and 6 percent this year, less than an earlier forecast for a contraction of as much as 9 percent.
The economy grew an annualized 20.4 percent last quarter from the previous three months, after declining a revised 12.7 percent between January and March, it said.
Singapore Growth
CapitaLand surged 10 percent to S$3.73. City Developments Ltd., Singapore’s second-largest property company, jumped 14 percent to S$9.38. City Developments has started selling an 85- unit development, the Business Times reported yesterday.
“This upward trend will continue for some time, as economic indicators have confirmed the economy is recovering,” said Harvey Chang, a SinoPac Securities Investment Trust Co. fund manager who helps oversee about $1.5 billion. “There’s plenty of money in the market.”
Energy shares, material producers and finance companies were the best performing of the
MSCI Asia Pacific Index’s 10 industry groups this week on speculation economic growth will boost commodity prices, real-estate demand and bank lending.
Alumina jumped 15 percent to A$1.52, while
Fortescue Metals Group Ltd., Australia’s third-largest iron ore exporter, climbed 15 percent to A$3.92.
BHP Billiton Ltd., the world’s largest mining company and Australia’s largest oil producer, added 7.8 percent to A$35.20.
Metals Rally
A gauge of
six metals in London rose 9.1 percent, the best week since Feb. 6. Oil futures in New York added 6.1 percent, the biggest weekly advance since May 29.
Among finance companies, Bank of Communications, part owned by
HSBC Holdings Plc, rose 8.3 percent to HK$8.83 in Hong Kong. HSBC, Europe’s largest lender, climbed 9.2 percent to HK$68.30.
Sumitomo Realty & Development Co., Japan’s No. 3 developer, rose 5.2 percent to 1,646 yen.
Takashi Hashimoto, a Barclays Capital analyst in Tokyo, assigned an “overweight” recommendation to the company in new coverage.
“The freefall of the economy has stopped,” New York University’s Roubini, who predicted the financial crisis, said on July 16. “There is light at the end of the tunnel. And the light at the end of the tunnel for once is not the one of an incoming train.” Roubini reiterated his view that the contraction would last 24 months.
To contact the reporter for this story:
Darren Boey in Hong Kong at
dboey@bloomberg.net.
Last Updated: July 17, 2009 21:24 EDT
IBM raises forecast for H2 is a vote of confidence of the recovery..ride the wave ; reward is high for holding..
saw many good news..the time has really come.
next few weeks will have a green all the way......
to all traders...ho seh liao...hahaha...
Citigroup reports quarterly profit of $4.3 billion, 49 cents per share, primarily due to a $6.7 billion boost from Smith Barney sale.
Ho seh liao.. time has come..
Housing starts surge
Government report says initial construction of U.S. homes rose to an annual rate of 582,000 units last month.
With all these strong indicator n good earning.. next week will be a wonderful week ;)
dealer0168 ( Date: 17-Jul-2009 19:33) Posted:
My mindset is bullish as well. I hope STI to hit 2600 n everyone huat ah...........
freeme ( Date: 17-Jul-2009 19:29) Posted:
Bank of America posts second-quarter profit of $3.2 billion, or 33 cents a share, topping estimates. But CEO Ken Lewis warns of more weakness in the global economy.
STI got chance to break 2424 convincingly liao next wk. Time to load up for the next leg up!
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