Fundamentals, US Markets

US Markets Rally With Dow Reaching another Fresh High

U.S. Session Key Developments

•    Commodities Rise Following Volatile Session
•    Dollar Strengthens into Close
•    Indicators Post Mostly Higher

US equities closed roughly at the same point of trading on Monday as markets recovered on higher commodity prices while fundamental indicators helped lead sentiment. Dollar weakness had been noted for much of the trading session until the greenback recovered to end stronger in the final hours. Several key data points included weaker mortgage approvals in the past week while durable goods orders surprised lower in October. Despite this, investors found optimism in an increase to personal spending and income, along with a rise in new home sales and jobless claims at the lowest since October 2008. Elsewhere in trading, gold surged higher to above $1190 per ounce, helping raw material producers to climb. Ultimately, the Dow managed yet another fresh 2009 high that could lift sentiment and lead to further gains across equities into the year-end. While there remains some clout as to the sustainability of recovery once government incentives are pulled back, it appears that this is far from becoming a chief concern. Following the strong data today, investors will be look ahead this week to lower volatility as trading in the US will be closed Thursday for the Thanksgiving holiday while Friday will see a half-day session of trading. Consequently no indicator releases are scheduled, with investors left in global crosswinds to watch releases abroad that range from jobs and sales in Japan to confidence in the Euro-Zone and other regions.

DJIA 30                      10,464.40                   +30.69               +0.29%
Trading in the Dow led to a fresh high just slightly above the top set on Monday. Most sectors advanced while a third of stocks closed lower including the financial sector. Moves proved limited today with no stock gaining or falling two percent or more. Ultimately, euphoric buying continues in equities with the index appearing to show little restraint while volume fell sharply for the third consecutive session. Concern should be noted, although the Dow remains the worst performer on the year-to-date of the three major indices, with a gain just shy of 20%.

S&P 500                    1,110.63                   +4.98                 +0.45%
The broader S&P500 index closed strong with all sectors advancing, with the exception of Financials. More than 75% of stocks climbed while Basic Materials and Oil & Gas led with gains of 1.67% and 0.95%, respectively. Of the ten largest firms, six closed higher while none posted more than a fractional move.

NASDAQ                         2,176.05                    +6.87             +0.32%
Trading in the tech-heavy NASDAQ led to a gain of one-third of one percent, while the index remains the most dominant since the start of the year with a gain of 38%. All sectors advanced with the exception of financials, down 0.15% on the day while Basic Materials rallied nearly two percent. Big index movers included Oracle, up 2.08%, as the only stock to add a point or more to the index. Of the ten largest firms, five closed higher with minimal losses in Microsoft, Apple and others.

Written by Roman Kadinsky, CFDTrading Research
Please send any comments about this report to Rkadinsky@fxcm.com