Dow Up 53 As Fed Pledges To Keep Interest Rates Low
April 29th, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 11,045.27 | 53.28 | 0.5% |
| NASDAQ | 2,471.73 | 0.26 | 0.0% |
| S P 500 | 1,191.36 | 7.65 | 0.6% |
| FTSE 100 | 5,586.61 | -16.91 | -0.3% |
| Nikkei 225 | 10,924.79 | -287.87 | -2.6% |
| ASX 200 | 4,822.80 | -57.2 | -1.2% |
| COMEX Gold - Dec 09 | 1,171.80 | 9.6 | 0.8% |
| COMEX Silver - Sep 09 | 18.135 | -0.014 | -0.1% |
| COMEX Copper - Sep 09 | 338.65 | 0.4 | 0.1% |
| WTI Spot | 83.3 | 1.59 | 1.9% |
| AUD-USD | 0.9253 | 0.01 | 1.1% |
| Aluminium | 2,262.50 | -31 | -1.4% |
| Copper | 7,645.00 | -115 | -1.5% |
| Lead | 2,291.00 | -19.5 | -0.8% |
| Nickel | 26,850.00 | -475 | -1.7% |
| Tin | 18,805.00 | -245 | -1.3% |
| Zinc | 2,375.00 | -27 | -1.1% |
The Dow recovered some of Tuesday night’s losses as it finished up 53 points. Boosting the market was the Federal Reserve’s pledge to maintain low interest rates and also better than expected earnings. The FOMC said in a statement that the labor market is improving as household spending is increasing. European credit issues continue as European markets fell 1.3% following the downgrade by S&P. It is said that European policy makers may need to provide as much as 600 billion euros ($794 billion) in aid or buy government bonds if they are to stamp out the region’s spreading fiscal crisis.
Gold was in demand by safe haven investors, it added $9.60, as more sour news surfaced regarding Europe’s efforts to deal with sovereign debt. Gold closed at a 5 month high despite the stronger USD which reached a 12 month high. Gold is being snapped up by speculators and bargain hunters this week as it seems to be considered a more higher risk commodity investment. The debt contagion fears have also produced buying of gold as traders move to hedge further downside of the European currency risk. Gold hit a new all-time high in Euro currency terms on Wednesday.
SPI futures indicates our market will open up 10 points. Our market has now tested 4800 support and bounced off it yesterday, closing at 4823. This level is not only a trend line support level from March 09 lows, but also right on the 100 day moving average. The selloff we have seen since our market tried to break 5000 is almost a necessary breather before buyers want to snap up stocks at these prices. Today, we could add 40 points to finish around 4860. A support level may be at 4810 on the downside. Options expiry for April is today – with funds freed up after exercise, it would be prudent to buy stocks whilst the market has dipped and to take advantage of time value out to May expiry.
News out today is AIO’s March quarterly operating update and QAN’s March operating statistics. Data out tonight in the States is US initial jobless claims. A couple of companies we have an eye on for May buy writes are – BHP and NCM, which are offering good premium. The Volatility index which measures implied volatility in the S&P 500 has actually added 30.6 % at 22.81 which is an indication that better returns can be made with higher option premiums on the board.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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