Dow up 274 points breaking the 10,000 level
July 8th, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10,018.28 | 274.66 | 2.8% |
| NASDAQ | 2,159.47 | 65.59 | 3.1% |
| S P 500 | 1,060.27 | 32.21 | 3.1% |
| FTSE 100 | 5,014.82 | 49.82 | 1.0% |
| Nikkei 225 | 9,279.65 | -58.39 | -0.6% |
| ASX 200 | 4,252.60 | -21.5 | -0.5% |
| COMEX Gold - Dec 09 | 1,198.90 | 3.8 | 0.3% |
| COMEX Silver - Sep 09 | 18 | 0.143 | 0.8% |
| COMEX Copper - Sep 09 | 301.5 | 4.4 | 1.5% |
| WTI Spot | 74.07 | 2.09 | 2.9% |
| AUD-USD | 0.8643 | 0.0126 | 1.5% |
| Aluminium | 1,946.00 | 34 | 1.8% |
| Copper | 6,523.00 | 83 | 1.3% |
| Lead | 1,755.00 | 23.5 | 1.4% |
| Nickel | 18,855.00 | 80 | 0.4% |
| Tin | 17,440.00 | 190 | 1.1% |
| Zinc | 1,814.00 | 49 | 2.8% |
The strong rally overnight was supported mostly by the financial sector as State Street Corp (the third largest US custody bank) rose after reporting earnings per share of 93 cents. This exceeded analysts' estimates and is a good sign of earnings ahead of the reporting season starting next Monday. Also boosting the market was speculation that the European banks may do well in the stress tests which will take place on the 23rd of July. European Union regulators are carrying out stress tests on 91 banks (65 percent of the area’s banking industry) to test their ability to ensure a slowing economy as well as drop in government bond values. EU banking regulators say that the tests may assume a loss of about 17 percent on Greek government debt and 3 percent on Spanish bonds which is better than forecasted by JP Morgan Chase and Co.
The market was also supported by the retail sector as the International Council of Shopping Centers said sales were increasing at the highest rate since 2006 – a good sign of consumer confidence.A very positive sign is the S&P 500 breaking back above the key technical level of 1040. Higher crude oil prices and rallies in other commodity markets supported buying interest in gold on Wednesday. Technical related selling pressure and lack of new fundamental news recently has kept the gold market from rallying. Overnight news that Chinese monetary officials said China will not use gold as a major channel for investment of its massive currency reserves was also deemed a bit bearish for the gold market.
Today our market will add around 86 points on open. Data to watch out for today is the unemployment rate for June which is expected to come out unchanged at around 5.2% at 1:30pm today. The banks look to bounce strongly today as short positions will look to take profit. The next level of resistance is 4400 which is where the short term moving average lies and would also be a 50% retracement from the last high made on the 22nd of June. We could see this move over the course of the week. Over the last 5 trading sessions, a positive sign is that the market has held above the May low of 4175 suggesting there is support on the downside. The market seems to have been waiting for a positive cue and we may have that now with the US retail sales at a 4 year high.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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