US Equities rallied today after personal spending rose by 0.5 percent in January.  The median forecast of economists surveyed by Bloomberg called for a smaller increase of just 0.4 percent.  This was the fourth straight gain for consumer spending, a figure that accounts for about 70 percent of the economy.  Today’s reading is a sign that Americans are regaining confidence in job and income prospects, which is translating into an expansion of spending.  Income also rose in January, though less than anticipated.  A separate report, released by the Institute for Supply Management, showed that manufacturing expanded for the seventh straight month in February.  The index fell to 56.5 from January’s 58.4, which was a five-year high.  Economists had been anticipating a slightly smaller drop to 57.9.

The greenback was stronger after the positive U.S. data.  The dollar index, which measures the currency’s performance against the currencies of its closest trading partners, gained 0.4 percent.  The British Pound was the worst performer of G7 currencies as political uncertainty and the massive UK budget deficit fuelled frantic selling of the currency.  The pound was 1.6 percent lower against the dollar and has breached 1.50 for the first time in 10 months.  Commodities declined on dollar strength with the CRB Commodity Index giving up 0.8 percent today.  Crude was a primary source of weakness as contracts for April delivery dropped 1.2 percent to $78.70.  Natural Gas contracts also came under pressure and dropped 2.8 percent in today’s session.  Precious metals traded only fractionally lower.  Looking ahead, this week features several Central Banks reporting interest rate decisions as well as the infamous US non-farm payrolls figure.  The abundance of macroeconomic event risk should provide for a lot of price action and volatility expectations have picked up accordingly.

DJIA 30                    10,403.79                +78.53                         +0.76%
The Dow Jones Industrial Average started the new month in positive territory led by International Business Machines, which contributed the most to the index’s advance.  Shares of IBM rose 1.1 percent to $128.57.  A group that represents IBM employees announced that IBM cut 500 US jobs today.  The group also said that job cuts at IBM this year will be far fewer than the 10,000 reported last year.  IBM has already accumulated over one billion dollars in workforce reduction expenses over 2008 and 2009.

S&P 500                     1,115.71                      +11.22                          +1.02%
The Standard and Poor’s 500 Index closed above its 2009 closing level for the first time since January 21^st today.  Overall, 9 out of 10 issues advanced on the broad-based index and bank stocks were the only industry group to decline.  Banks dropped 0.2 percent as a group after HSBC reported weaker than expected 2009 full-year results.  Basic Materials stocks shrugged off a stronger dollar and led all other sectors higher.  All 26 issues were in the green today as the group gained 1.8 percent.

NASDAQ                   2,273.57                   +35.31                         +1.58%
The tech heavy Nasdaq Composite was the best performer of the three major US indices.  Tech stocks gained 1.5 percent as a group.  Apple contributed the most to the sector’s advance as the company’s shares gained 2.6 percent.  Deutsche Bank added the company to its short-term buy list, citing strong order momentum for the iPhone.

Written by Gary Chalik, CFDTrading Research
Please send any comments about this report to GChalik@fxcm.com

U.S. Equities Trim Weekly Loss On Fourth Quarter GDP Revision

U.S. Session Key Developments

•    U.S. Fourth Quarter GDP Revised Higher to 5.9 Percent, Personal Consumption Lower
•    Existing-Home Sales Drop in January, Chicago Business Gauge Better-Than-Expected
•    Commodities Trade Higher as Greenback Falls Against Major Cross Currencies

U.S. stocks posted a slight gain in the final day of trading this week, as estimates for fourth quarter economic growth were shown to be higher than previously thought.  Despite today’s gain, however, the S&P 500 closed the week down 0.4 percent to 1,104.  The market-moving GDP revision was announced one hour before the opening bell and showed that the U.S. economy expanded 5.9 percent in the fourth quarter of 2009, better than the 5.7 percent initial estimate.  The GDP data was revised higher thanks to stronger business investment in the quarter and a greater contribution from inventories.  The personal consumption aspect, however, was revised lower to 1.7 percent from a 2.0 percent initial reading.  Overall, stocks traded mostly sideways during the session as other economic data released today was mixed.  The Chicago Purchasing Managers Index unexpectedly rose from 61.5 to 62.6 in February, but the University of Michigan Confidence indicator fell in the month and existing home sales disappointed for January.  Home sales were expected to rise 0.9 percent in January but instead were shown to have fallen 7.2 percent, after declining 16.2 percent in the month prior.

Globally, stocks had a strong day as the major European indices and China’s Hang Seng Index each traded at least 1 percent higher.  Investor risk appetite made a strong return as commodities joined stocks in trading higher across the board.  Crude oil prices gained for the third time this week, adding nearly 2 percent to $79 a barrel, while gold futures posted a second consecutive gain and closed the week near the $1120 level.  As for currencies, the U.S. Dollar was generally weak, falling against most of its major counterparts, including the euro.  The U.S. Dollar Index fell for a third consecutive day, but held above the 80 level for a seventh consecutive session.

DJIA 30                     10,325.26                      +4.23                       +0.04%
The Dow Jones Industrial Average closed slightly above even on a low-volume trading day.  Volume on U.S. exchanges today was slightly under 8 billion shares, 11 percent less than the 2010 average due to a snow storm in New York City and the surrounding area.  JPMorgan Chase led the index with a 3.2 percent gain after analysts at Barclays recommended buying the bank’s shares.  The bullish commentary led to a near full percent gain among financial shares.  Other stocks that outperformed the index included General Electric and drug maker Merck, which each added 0.8 percent on the day.  The worst performer on the index was Kraft Foods, which fell over 1.3 percent on the day.

S&P 500                     1,104.49                         +1.55                         +0.14%
The broad-based S&P 500 posted a small gain in the final day of trading this week on strength in financials and basic materials shares.  Financials rose nearly 0.7 percent on bullish commentary from Barclays analysts as well as commentary from Fed Chairman Ben Bernanke in the past two days that suggested rates would remain low for the foreseeable future.  The basic materials sector added 0.3 percent today, as commodities generally traded higher during the session.  Mining company Freeport McMoRan gained over 1 percent, while Barrick Gold Corp. added 0.2 percent on higher precious metals prices.  On the downside, AIG fell 10 percent for the biggest loss  on the index after posting a fourth-quarter net loss of $8.8 billion.

NASDAQ                     2,238.26                         +4.04                         +0.18%
The tech-heavy Nasdaq was the best performer among major U.S. indices as technology stocks posted a slight gain.  Among the heaviest-weighted fifteen tech stocks on the index, smart phone competitors Research in Motion and Apple posted the largest gains.  Shares of each company rose at least 1.2 percent as shares of Palm, another smart phone competitor, sank on news that company sales may be very weak this year.  Qualcomm was the worst performer among the large Nasdaq tech stocks, dropping 1.3 percent on the session.

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

US Equities Rise on Dovish Interest Rate Comments

U.S. Session Key Developments

•    Bernanke Signals Prolonged Low Interest Rate Environment
•    New Home Sales Fall to Lowest Level on Record in January

US Equities rose for the first time this week following Federal Reserve Chairman Ben Bernanke’s dovish comments before a house panel.  In the statement that was released, Bernanke reiterated that economic conditions “are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”  The fed funds futures implied probability of a 25 basis point rate hike in the April FOMC date decreased today to 5.3 percent from 6.6 percent yesterday.  In addition to Bernanke’s comments, a report by the commerce department released at the same time showed sales of new homes unexpectedly fell to the lowest level on record in January.  Stock benchmark indices temporarily pared their advance after the latter report and the dollar was pushed lower.  The greenback was lower by as much as 0.6 percent following the housing report but trimmed losses to close 0.1 percent lower.  Sterling was the only one of the G7 currencies to decline against the dollar today.  Despite the dollar’s recovery from today’s lows, commodities were able to move higher.  The CRB Commodity Index was higher by 0.9 percent.  Oil was especially strong, finishing up 1.45 percent despite a larger than expected build in weekly crude oil inventories.  On tomorrow’s economic docket investors will be awaiting US durable goods orders.  Strong demand for long lasting items is a sign of improving optimism and potential growth.  Economists are currently predicting that durable goods orders rose 1.4 percent in January.

DJIA 30                      10,374.16                    +91.75                         +0.89%
Only two stocks declined today as the Dow Jones Industrial Average rose for the first time this week.  JP Morgan and Bank of America paced gains on the index after Bernanke’s dovish interest rate comments.  Both companies’ shares were up over 2.4 percent.  Banks would benefit tremendously from a prolonged low interest rate environment.  The two declining issues were Kraft Foods and Alcoa, which dropped 0.3 percent and 0.9 percent respectively.

S&P 500                     1,105.24                      +10.64                         +0.97%
Financial stocks led the broader Standard and Poor’s 500 Index higher today.  The sector was up 1.7 percent.  Basic resource stocks struggled today.  As a group they dropped 0.1 percent, the only sub-sector that failed to log a gain.  H&R Block fell the most in the S&P 500, slumping 13 percent after the tax preparer announced they would not meet their forecasts for fiscal 2010.

NASDAQ                   2,235.90                      +22.46                         +1.01%
The tech heavy Nasdaq Composite was the best performer of the three major US indices.  Tech stocks gained 1.06 percent as a group.  Tech giants Apple, Microsoft, and Intel contributed the most to the sector’s advance as all three companies gained more than 1 percent.  Google shares gave up 0.7 percent after antitrust complaints were filed against Google by three European companies.

Written by Gary Chalik, CFDTrading Research
Please send any comments about this report to GChalik@fxcm.com

U.S. Equities Retreat For Second Day on Weak Confidence Data

U.S. Session Key Developments

•    Consumer Confidence Falls to 10-Month Low
•    Commodities Sell-Off, Dollar Gains
•    Fed Chairman Bernanke to Deliver Report on Economy Tomorrow and Thursday

U.S. stocks retreated today on weak consumer confidence data and falling commodity prices.  The S&P fell for a second consecutive day to its lowest closing level since February 12.  Investors turned bearish after the Conference Board announced its confidence index fell in February from 55.0 to 46.0, its lowest reading in ten months.  The weak confidence data shows that economists do not believe the U.S. economy is out of the woods yet and the recovery will struggle to overcome major hurdles that still remain.  Weak consumer spending and high unemployment are the most obvious concerns going forward, and San Francisco Federal Reserve President Janet Yellen said yesterday that she does not see the employment situation improving much this year.  Further weakening sentiment today was the S&P/Case-Shiller housing index that showed home prices fell annually for a third consecutive month in December to their lowest levels since July.  The data led to widespread risk aversion that filtered through commodities as well as stocks.  Crude oil fell 1.8 percent to $78.86, while gold and silver prices fell 0.8 percent and 2 percent, respectively.  Looking ahead, all eyes will be on Fed Chairman Ben Bernanke’s testimony before House and Senate panels both tomorrow and Thursday.  This is his semi-annual report to Congress regarding the state of the economy as well as monetary policy.

DJIA 30                     10,282.41                      -100.97                       -0.97%
The Dow Jones Industrial Average posted a near 1 percent decline as twenty-seven of the thirty index stocks closed lower on the day.  General weakness in commodity prices hurt the basic materials and industrial sectors, as aluminum giant Alcoa dropped 2.5 percent and equipment maker Caterpillar fell 2.3 percent.  A drop in crude oil futures below $79 pushed shares of energy giants Chevron and Exxon Mobil down 1.2 percent and 0.7 percent, respectively.  One of the few bright spots on the Dow was Home Depot, which posted a 1.4 percent gain to lead the index after announcing better-than-expected earnings and its first dividend increase since 2006.  Kraft Foods also posted a modest gain today of 0.6 percent after analysts at Credit Suisse gave the stock an ‘overweight’ rating.

S&P 500                     1,094.60                         -13.41                         -1.21%
The broad-based S&P declined over 1 percent on weakness in commodities and the financial sector.  Shares in financial firms traded lower after the FDIC announced that bank failures are continuing their torrid pace, with one of every 11 banks at risk of failure as of the fourth quarter.  The sector fell nearly 2 percent on the FDIC announcement, as well as a news briefing from White House spokesman Robert Gibbs where he said that the Obama administration continued to back the Volcker banking plan in its current form.  According to the proposed regulation, banks would no longer be allowed to use proprietary trading operations, hedge funds, or private equity funds in ways that are unrelated to directly serving their customers.  Citigroup fell 3 percent on the news, while JPMorgan Chase, Wells Fargo, and Morgan Stanley dropped at least 2 percent each.

NASDAQ                     2,213.44                         -28.59                         -1.28%
The tech-heavy Nasdaq was the worst performer of the major U.S. stock indices as technology shares fell over 1.5 percent.  The twenty largest tech companies on the index all posted losses today, led by declines in Applied Materials and Marvell.  The semiconductor firms fell 3.5 percent and 2.5 percent, respectively, despite a generally favorable report on the sector released yesterday by analysts at UBS.  The world’s largest chipmaker, Intel Corp., faltered over 2 percent after announcing that the company, alongside venture-capital companies, will invest $3.5 billion in the U.S. technology sector over the next two years to facilitate domestic job growth.

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

US Equities Drop On Lower Commodity Prices

U.S. Session Key Developments

•    Ben Bernanke May Signal Prolonged Low Interest Rate Environment
•    Commodities Fall Led By Natural Gas and Precious Metals

US Stocks were lower today for the first time in five days.  Last week, the S&P 500 and Dow Jones Industrial Average both gained at least 3 percent, their biggest gains since November.  Initially, equity index futures were pointing to a higher open amid speculation the Federal Reserve Chairman Ben Bernanke may signal U.S. interest rates will be kept near a record low.  However, stocks spent most of the day in negative territory as lower commodity prices dragged down commodity shares.  The CRB Commodity Index was down 0.4 percent led by declines in soft commodities, precious metals, and natural gas.  The three were down 2.96 percent, 0.98 percent, and 2.85 percent respectively.  In the precious metals space, gold was down 0.8 percent and silver was down 1.2 percent.  The two metals have a high negative correlation to the dollar, which didn’t hold today as the dollar index actually gave up 0.1 percent.  However, the greenback did gain marginally against the euro, which represents the US’s largest trading partner.  In store for tomorrow are reports on US Consumer Confidence as well as US House Prices.  Both are key indicators of the continued strength of the economic recovery.

DJIA 30                      10,383.38                   -18.97                          -0.18%
The Dow Jones Industrial Average was down for the first time in five days.  Chevron, which produces and transports natural gas, contributed the most to the Dow’s decline as natural gas prices fell 2.85 percent.  The company’s shares were down 1.47 percent.  JP Morgan and Bank of America both gained over 2 percent as the companies would benefit tremendously from a prolonged low interest rate environment.

S&P 500                       1,108.01                         -1.16                            -0.10%
Only two of the ten industry sectors were up today as the broad-base Standard and Poor’s 500 Index was down 0.1 percent.  Financial and industrial stocks were the only sectors to advance with Financials up over 1 percent.  The sector gained as investors expect Bernanke to signal that U.S. interest rates will be kept near record lows when he testifies in front of Congress on Wednesday and Thursday.  A prolonged low interest rate environment would benefit banks tremendously.

NASDAQ                     2,242.03                       -1.84                           -0.08%
The tech heavy Nasdaq Composite posted the smallest lost of the three biggest U.S. benchmark indices as tech stocks lost only 0.1 percent.  Just under half of all tech stocks listed on the index were up today.  Oracle contributed the most to the sector’s advance as the company’s shares gained 2 percent.  This weekend, CEO Larry Ellison said he has high expectations for Sun Microsystems, the unprofitable hardware maker that Oracle bought last month for $7.5 billion.  Ellison was questioned about the acquisition in a press conference following his return to San Francisco after the billionaire successfully recaptured the America’s Cup trophy for the United States.

Written by Gary Chalik, CFDTrading Research
Please send any comments about this report to GChalik@fxcm.com

US Equities, Commodities, Greenback All Higher After CPI Report

U.S. Session Key Developments

•    CPI Report Relieves Investors of Fed’s Stimulus Withdrawal
•    Dollar Reaches Eight Month High Against Basket of Currencies

A lower than expected rise in the Consumer Price Index gave US stocks a lift and helped cap off the biggest weekly rally since November.  Initially, index-futures had been pointing to a lower open after the Fed raised the discount rate by a quarter point to 0.75 percent in a surprise decision made yesterday after exchanges closed.  Investors worried that the move was the first of many that the Fed would be taking to remove the unprecedented stimulus that has been propping up the financial system.  Futures than pared losses after the CPI rose 0.2 percent in January, less than the 0.3 percent economists had been predicting.  The CPI, a gauge of consumer inflation, quieted investors’ worries by signaling that inflation has not yet become a problem.

The greenback spiked after yesterday’s surprise Fed move but also trimmed gains after the CPI data.  The dollar index, a measure of the dollar’s strength against its major trading partners, was as high as 81.342 before closing the week at 80.553—its highest weekly close since the first week of June 2009.  Commodities gained despite the strength in the greenback with the CRB Commodity Index up 0.6 percent.  Precious metals were the best performers, with gold spot up 0.95 percent and silver spot up 2.9 percent.  Energy was also up as crude gained 0.95 percent but natural gas gave up 2.47 percent.  Next week we will hear about US Consumer Confidence as well as fourth-quarter GDP as we wait to see if equities can continue with this week’s rally.

DJIA 30                  10,402.35                    +9.45                           +0.09%
The Dow Jones Industrial Average gained for the fourth straight day to finish the week up 2.5 percent.  The index trimmed its 2010 decline to less than 0.3 percent after briefly turning positive for the year during the session.  Just over half the issues were up today as Pfizer, Du Pont, and Boeing all gained over 1 percent to lead the advance.

S&P 500                     1,109.17                      +2.42                           +0.22%
Six of the ten industry sectors were up today as the Standard and Poor’s 500 Index posted the largest advance of the three major US indices.  Utility stocks were up 1.41 percent as crude oil reached a five-week high.  Financial stocks rose 0.57 percent as a group as Berkshire Hathaway, a recent addition to the S&P, gained 2.74 percent to contribute the most to the S&P’s advance.  Berkshire shares closed at 78.74, a 15-month high.

NASDAQ                   2,243.87                      +2.16                           +0.10%
The tech heavy Nasdaq Composite Index closed higher today despite tech stocks giving up 0.27 percent.  Just over half of tech stocks advanced while Dell contributed the most to the sector’s decline.  The company’s shares dropped 6.7 percent after the PC manufacturer reported that gross margin fell below the 18 percent projected by analysts.  Holiday sales of low-priced PCs and higher component costs weighed on earnings.

Written by Gary Chalik, CFDTrading Research
Please send any comments about this report to GChalik@fxcm.com

U.S. Equities Rally For Third Day, Fed Tightens After Hours

U.S. Session Key Developments

•    Fed Unexpectedly Raises Discount Rate By 0.25 Percent After Hours
•    Commodities Advance During Market Hours, Fall After Hours on Fed Hiked
•    Philadelphia Fed Index Higher For Sixth Month, Leading Indicators Rise Slightly

U.S. stocks rallied for a third day, capping the biggest three-day rally since November for the Dow Jones Industrial Average and S&P 500.  The news of today’s trading was quickly overshadowed thirty minutes after close, however, when the Federal Reserve unexpectedly raised the discount rate by a quarter point to 0.75 percent.  During trading hours, the market moved steadily higher as investors were encouraged by further strength in commodity producing firms and generally positive economic data.  The economic docket provided an upbeat outlook for market participants as the  Philadelphia Fed beat expectations and rose for a sixth consecutive month to 17.6, while leading indicators gained for a tenth straight month.  Stocks and commodities rallied in tandem, as crude oil traded above $79 a barrel and gold held above $1120 during the session.  Commodities moved sharply lower after hours, however, as the Fed unexpectedly announced a quarter point rise in the discount rate- the rate charged to banks for direct loans from the central bank.  The rate had previously been held at 0.50 percent since 2008 as Fed policy makers maintained a dovish stance amidst the worst financial crisis since the Great Depression.  In their statement today, the central bank said that “these changes are intended as a further normalization of the Federal Reserve’s lending facilities.”  The policy statement went on further to state that the modification does not signal a change in the outlook for the economy or monetary policy, although some market participants appear to disagree.  The dollar rose nearly a full percent to $1.3510 per euro following the announcement, and gold futures sold off from their $1118-$1125 intraday range back to the $1100 level.

DJIA 30                     10,392.90                      +83.66                       +0.81%
The Dow Jones Industrial Average posted the largest gain among major U.S. equity indices, led by a 1 percent gain in financial and industrial shares.  Insurance company Travelers was the best performer on the index, adding 1.9 percent, followed by Boeing, whose shares rose 1.7 percent.  Furthering gains among financial shares were Bank of America and JPMorgan Chase, whose shares gained 1 percent each.  Procter and Gamble also traded higher, adding nearly 1 percent, after company executives reiterated its strong earnings expectations for 2010.  Walmart was the biggest laggard of the 30 Dow stocks, dropping over 1 percent after sales by U.S. stores fell 1.6 percent, worse than the company’s projection of 2 percent.  The company’s fourth quarter profit actually beat estimates, although revenues fell short of analyst expectations.

S&P 500                     1,106.75                         +7.24                         +0.66%
The broad-based S&P posted its third consecutive gain led by basic materials and industrials.  Precious metals continued their climb during the regular trading hours, pushing Newmont Mining and Freeport McMoRan higher by at least 2 percent each.  Priceline.com rose the most on the index, gaining nearly 10 percent after announcing that forecast first-quarter profit is significantly higher than analyst estimates.  Hewlett-Packard, the world’s largest personal-computer maker, rallied over 1 percent after the company posted a 25% profit jump from one year ago.

NASDAQ                     2,241.71                         +15.42                         +0.69%
The tech-heavy Nasdaq rallied for a fifth consecutive session as technology stocks gained over 0.8 percent on the day.  The fifteen largest technology companies on the Nasdaq closed higher today, with the exception of Teva Pharmaceutical.  The top performing large tech company was DirecTV, whose shares gained over 4 percent on the session.  DirecTV added customers in the fourth quarter last year despite a rise in monthly bills for customers.

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

U.S. Equities Extend Gains on Data, Dollar Rebounds

U.S. Session Key Developments

•    Housing Data Exceeded Forecasts Showing Signs of Real Estate Stabilization
•    Dollar Recovers Yesterday’s Losses and Provides Weakness For Commodities

Today’s economic docket provided investors with better-than-expected results across the board, bolstering confidence in the economic recovery.  January housing starts topped economists’ median forecast of 580,000, providing evidence that government stimulus has helped stabilize the real estate market.  Additionally, industrial production rose 0.9 percent in January, more than the 0.7 percent that had been anticipated.  The positive industrial data comes a day after the NY Fed reported that manufacturing in the tri-state area grew at the fastest pace in four months.  Afternoon trade was dominated by the release of the minutes from the FOMC meeting held January 26-27.  The minutes showed that the committee discussed ways to reduce the stimulus to the economy, most notably by shrinking the Fed’s balance sheet.  Some top officials pushed to start selling assets in the “near future” and return the bank’s holdings to just Treasuries.

Equities gained today despite renewed strength in the greenback and weakness in commodities.  The dollar index, a measure of the greenback’s strength against a basket of other currencies, gained 1 percent today and closed the NY session at its highest level in 7 months.  The dollar gained amid the positive US economic data as well as comments from an ally of Germany’s Chancellor Angela Merkel, who said “not a single euro” should go to Greece.  Meanwhile, commodities gave up some of yesterday’s gains with the CRB Commodity Index down 0.3 percent.  Led by gold, precious metals, which have been particularly sensitive to the dollar’s movements, were the major driver of commodity losses.  The yellow metal was down 1.2 percent to $1106.70 per ounce in COMEX trade.  Meanwhile, the energy space was mostly higher with crude actually gaining 0.4 percent to close at $77.33.

DJIA 30                      10,309.24                    +40.43                         +0.39%
Almost 2 stocks advanced for every 1 that declined as the Dow Jones Industrial Average added to yesterday’s significant gains.  Bank of America posted the biggest gain on the Dow for the second day in a row.  The company gained 3.3 percent after French competitor BNP Paribas posted impressive earnings and sent bank shares higher worldwide.  Right behind the bank was Home Depot, which gained 1.97 percent after Oppenheimer upgraded the company’s shares to “outperform” from “market perform.”

S&P 500                     1,099.51                      +4.64                           +0.42%
Consumer services and health care stocks led the broader Standard & Poor’s 500 Index to its second gain in as many days.  Both sectors were up over 0.8 percent.  Consumer services were pushed higher amid analyst upgrades to Home Depot and Whole Foods Market.  The shares of the latter surged 13 percent to post the biggest gain on the S&P 500.  Commodity related industries provided weakness amid lower commodity prices and a higher dollar.

NASDAQ                   2,226.29                      +12.10                         +0.55%
The tech heavy Nasdaq Composite Index was the best performer of the three major US indices as tech stocks gained 0.4 percent.  Sirius XM Radio was one of the better performing issues on the index today as the company’s shares broke $1 for the first time since before Lehman’s collapse in September 2008.  The company was in danger of being delisted from the Nasdaq when its shares reached a low of 5 cents in February.  Since then the company has gained 1809 percent and now needs to close above $1 for 10 consecutive days to keep its spot on the index.

Written by Gary Chalik, CFDTrading Research
Please send any comments about this report to GChalik@fxcm.com

U.S. Equities Surge On Rising Commodities, Manufacturing Data

U.S. Session Key Developments

•    Crude Oil Posts Biggest Advance in Four Months, Gold Posts Largest Gain in Three Months
•    Empire Manufacturing Grows At Fastest Pace in Four Months
•    U.S. Dollar Falls For Third Consecutive Day Against Major Currencies

U.S. stocks rallied in the week’s first day of trading as strong manufacturing data and a revival in risk appetite boosted commodity and equity markets.  The positive shift in sentiment helped push the S&P 500 to its largest gain since November 5.  Initially, markets moved higher on the open after a release from the Federal Reserve Bank of New York showed that manufacturing in the tri-state area surpassed expectations in February.  The manufacturing index grew at the fastest pace in four months, rising from 15.92 to 24.91, as sales increased and unemployment subsided.  Furthering today’s stocks rally were rising commodity prices, led by crude oil which posted a 4 percent gain to close above $77 a barrel.  Gold and silver rallied 2.7 percent and 4.6 percent respectively, as the U.S. Dollar Index fell for a third consecutive session.  The euro posted its first gain against the greenback in a week as Greek Finance Minister George Papaconstantinou said that his country had “no actual need for” a bailout and was ahead of its deficit-reduction targets.  Overall, U.S. equities remain in the red this year, but valuations have become more reasonable and there may be opportunity for growth going forward.  According to Bloomberg, the S&P 500 is currently valued at 18.8 times the reported earnings of its companies, a significant drop-off from its 24.5 P/E valuation in December.

DJIA 30                     10,268.81                      +169.67                       +1.68%
The Dow Jones Industrial Average posted its largest gain since November as commodity and financial shares gained over 2 percent each.  Twenty-eight of the Dow’s thirty stocks closed higher on the session.  Bank of America was the top performer on the index today, rising nearly 5 percent as financial shares around the globe rallied on better-than-expected earnings from Barclays Bank.  American Express and JPMorgan Chase followed suit, gaining at least 2.8 percent each on the session.  As for commodity shares, Alcoa posted a 3.4 percent gain on rising costs for aluminum, while energy giants Chevron and Exxon Mobil each added over 2 percent.  Pfizer and Kraft were the only shares to trade lower today, dropping 0.4 percent each.

S&P 500                     1,094.87                         +19.36                         +1.80%
The broad-based S&P was the biggest gainer among major U.S. indices as all ten sectors on the index closed higher on the day.  Commodity stocks were the strongest performer, gaining over 2.6 percent, while financial and industrial shares also gained over 2 percent on the day.  Range Resources led the energy industry today, gaining over 6.6 percent, and was followed closely by First Solar, which added 5.4 percent.  First Solar will report its fourth quarter earnings later this week.  Industrial shares were pushed higher by a 3.1 percent gain for General Electric after the better than expected Empire Manufacturing Index reading for February.  Boeing and UPS also gained at least 2 percent each on the day.

NASDAQ                     2,214.19                         +30.66                         +1.40%
The tech-heavy Nasdaq rallied for a third consecutive session as technology stocks gained over 1.4 percent on the day.  The thirty largest technology companies on the Nasdaq closed higher today, with the exception of Blackberry maker Research in Motion.  The top performing large tech company was Seagate Technology, which added over 5 percent on the session, followed by a 4 percent gain for Autodesk.  PricewaterhouseCoopers said today that acquisition activity within the technology sector will return to “robust” levels this year after the value of such deals fell by more than 50 percent in 2009.

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

U.S. Equity Markets Closed for President’s Day

Today’s Session Key Developments

•    European Union Officials Pressure Greece to Take More Measures to Cut Debt
•    Precious Metals Trade Higher, Greenback Rises Against European Counterparts

U.S. equity markets were closed today for the President’s Day Holiday.  Although stock prices were unchanged, the U.S. Dollar posted gains against its European counterpart for an eighth time in the last nine days.  Today, the exchange rate fell below $1.36 per euro for the first time since May 2009.  Investors remained pessimistic regarding the debt situation in Greece and concerned that the problems may spread into other nations.  European Union economics officials told Greece leaders that more steps need to be taken to reduce the country’s budget deficit.  Despite the concerns, European equities managed to close higher thanks to rising commodity prices and better-than-expected earnings reports.  As for U.S. markets, there is no major economic data released tomorrow to drive investor sentiment, but fourth quarter earnings will be released for Abercrombie & Fitch, Qwest Communications, and Teva Pharmaceutical.

DJIA 30                      10,099.14                      –.–                             -.–%

S&P 500                       1,075.51                       –.–                            -.–%

NASDAQ                       2,183.53                       –.–                            -.–%

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

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