Fundamentals

U.S. Stocks Rise on One-Year Anniversary of Bear-Market Low

U.S. Session Key Developments

• Dollar Traders Provide Direction For General Market

• Fitch Issues Warnings on UK and Portugal Budget Deficits

• Commodities Moderately Lower on Higher Dollar

Exactly a year after US equity markets had their lowest close in over twelve years, stocks resumed last week’s gains after closing slightly lower yesterday.  The broad-based Standard & Poor’s 500 Index gained 0.2 percent today and is now less than 10 points (0.9 percent) off of its January 19 high of 1150.23.  With no big economic releases this morning, investors looked towards the dollar for direction.  The dollar had been as much as 0.5 percent higher against its major trading partners around the time of the open causing stocks to open lower.  As the dollar pared gains, stocks recovered and were 0.6 percent up at the market’s peak.  Equities dipped below yesterday’s close one more time in the last hour of trading before settling just above that close.  Much of the dollar’s strength came from weakness in Sterling and the Euro.  The two currencies dropped 0.5 and 0.2 percent against the greenback respectively as Fitch issued warnings about both the U.K. and Portuguese budget deficits.  Meanwhile commodity currencies were mostly higher against the dollar despite the CRB Commodity Index dropping 0.7 percent.  Crude was down 0.6 percent to $81.81 per barrel while gold gave up 0.3 percent to $1122 per troy ounce.

DJIA 30 10,564.38 +11.86 +0.11%

A little over half of components gained today, led by advances in the telecom and Industrial spaces, which each gained over 0.9 percent.  Basic Materials stocks weighed on the market as no components in that sector gained and the sector lost 0.5 percent overall.

S&P 500                     1,140.45 +1.95 +0.17%

The broader S&P 500 saw gains from a wider group of sectors.  Telecom and Industrial stocks paced the S&P 500 as well, however Tech, Financial, and Energy stocks also gained.  Basic Materials stocks were the worst performers here as well as Commodities were generally lower.

NASDAQ 2,340.68 +8.47 +0.36%

The tech heavy Nasdaq Composite was the best performer among the three main U.S. equity indices.  Basic Materials and Energy stocks were the only groups in the red and Tech stocks, which hold by far the most weight, were up 0.5 percent as a group.

Written by Gary Chalik, CFDTrading Research

Please send any comments about this report to GChalik@fxcm.com