Fundamentals

The Dow Posts Biggest Rally Since July

U.S. Session Key Developments

•    Cisco Systems and IMS Health Inc. Lead U.S. Stocks Higher
•    U.S. Jobless Claims and Productivity Data Beat Estimates

U.S. equities soared today after positive employment and productivity in the morning.  The Labor Department announced that initial jobless claims and continuing claims in the U.S. fell more than expected from the prior week, while nonfarm productivity increased 9.5% in the third quarter, its fastest pace in six years.  This data provided a boost for equities as more than nine stocks gained for every stock that fell on the New York Stock Exchange.  Cisco systems gained 2.75% after profits were announced at 36 cents, higher than analyst estimates for 31 cents.  Health care data company IMS Health Inc. surged 23 percent after agreeing to be bought by investment funds TPG Capital and CPP Investment Board for $4 billion.  While equities rallied, commodities were mixed as gold closed higher for a fourth day but crude oil dropped below $80.  The U.S. dollar posted slight gains against its major currency crosses but the Dollar Index closed below 76 for the second straight day.

DJIA 30                      10,005.96                   +203.82           +2.08%
The Dow posted its largest gain since July to close above 10,000 for the first time in two weeks.  Every represented industry gained today with the financials especially strong as American Express, JP Morgan, and Bank of America each posted significant gains on the day.  Other strong showings from the index wer Du Pont, Disney, and Caterpillar which each gained over 3 percent on the session.

S&P 500                    1,066.63                          +20.13                 +1.92%
Trading in the broad 500 member S&P index led to nearly a 2 percent gain as all 10 industry groups advanced at least 0.6 percent. Major firms declining included the four largest banks, JPMorgan, Wells Fargo, Citigroup and Bank of America. Others selling lower included Goldman Sachs and insurers. On the other end of the spectrum, Microsoft rose 1.81% while Wal-Mart maintained its advance by nearly one percent. Ultimately, the S&P500 remains below its 50-day moving average, and weakness into the close today is likely to keep investors on edge about buying just yet.

NASDAQ                         2,105.32                    +49.80            +2.42%
The tech-heavy NASDAQ posted the strongest gain of the U.S. equity indices after taking a small dip in yesterday’s session.  The technology portion of the NASDAQ closed 2.18% higher led by strong performances by Qualcomm, which gained over 5 percent after providing its financial outlook for the end of 2009 and 2010.  Cisco Systems and Dell added over 2 percent each today, while Microsoft, Google, and Apple each gained over a percent on the session.

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com