Dow rallies 254 points, biggest move since May
September 2nd, 2010 by Katy Loi
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 10,269.47 | 254.75 | 2.5% |
| NASDAQ | 2,176.84 | 62.81 | 3.0% |
| S P 500 | 1,080.29 | 30.96 | 3.0% |
| FTSE 100 | 5,366.41 | 141.19 | 2.7% |
| Nikkei 225 | 8,927.02 | 102.96 | 1.2% |
| ASX 200 | 4,495.70 | 91.5 | 2.1% |
| COMEX Gold - Dec 09 | 1248.1 | -2.2 | -0.2% |
| COMEX Silver - Sep 09 | 19.393 | -0.039 | -0.2% |
| COMEX Copper - Sep 09 | 346.85 | 10.75 | 3.2% |
| WTI Spot | 74 | 2.08 | 2.9% |
| AUD-USD | 0.9111 | 0.0202 | 2.3% |
| Aluminium | 2,059.00 | 14 | 0.7% |
| Copper | 7,540.50 | 185 | 2.5% |
| Lead | 2,089.00 | 78.5 | 3.9% |
| Nickel | 21,045.00 | 335 | 1.6% |
| Tin | 21,430.00 | 80 | 0.4% |
| Zinc | 2,089.00 | 42 | 2.1% |
The Dow closed up a strong 254 points, the biggest move since May, after data showed faster than expected growth in manufacturing in the US. Factories have increased the number of employees and productivity is also on the rise. The Institute for Supply Management's gauge of manufacturing rose to 56.3 in August from 55.5 in the previous month, with figures greater than 50 generally indicating growth. Also supporting our market was data out yesterday showing China's purchasing managers’ index rose to 51.7 last month from 51.2. Yesterday being the first day of the month, it generally means a net inflow of funds into equities and is likely to continue today. Historically, the market in the US has tended to rise ahead of the Labor Day holiday.
The months of September and October have historically seen more turbulence in the stock, financial and currency markets, which is an underlying supportive factor for gold. A strong down day for the U.S. dollar index did limit selling interest in gold. Investors are still awaiting Friday's U.S. employment report, which is expected to show the key non-farm payrolls figure to be down 123,000 in August, following a decline of 131,000 jobs in July. The unemployment rate is forecast to come in at 9.6% from the July reading of 9.5%. More volatility may come in after the release of Friday morning's jobs data.
Today our market looks to open 80 points stronger extending its stellar 2% rise yesterday after better than expected GDP and China’s PMI data. We are now looking to break resistance at 4494 with the next level being the last high of 4597 from August 10. The 200 day moving average sits at 4640 which we may see this week. The next level is a Fibonacci retracement level at around 4690. Our resource stocks may lead the rise today as base metals were strong; copper up around 1% and aluminum up over 2.4 percent. The strong price of copper will support BHP, RIO and OZL and most gold producers. As China accounts for 40% of copper consumption around the world, its positive data yesterday will also support demand for the metal.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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