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Tuesday 08 Sep 2009 14:55:41
US Market
Commodity Price Rally May Spur Buying Interest
The major U.S. index futures are pointing to a higher opening on Tuesday, with the optimism that characterized trading in Asia and Europe likely to pervade into the U.S. markets, which are opening after Monday’s public holiday. Commodity prices are once again on a roll, with gold breaching the $1000-an-ounce mark, with the optimism reflecting expectations of a recovery in demand and in turn an economic revival. Trading volume may remain thin, as traders return to their desk after ‘Labor Day.’
The return of M&A activity point to corporate America’s faith in growth and therefore may serve as a positive catalyst. That said, a lack of any major economic and corporate news could lead to some indecision in the session even as traders harbor hopes of a turnaround.
The major U.S. averages broke a 2-week winning streak in the week ended September 4th, as fears that the recent gains may have been overdone kept sentiment subdued in the markets throughout the week. Last Monday, economic worries dampened the mood of traders, as the major averages closed with moderate losses. Notwithstanding the support provided by some economic data, stocks fell sharply on Tuesday, with the major averages all ending down about 1%, dragged down by weakness in the financial space.
On Wednesday, stocks closed modestly lower amid some degree of volatility, as traders digested a few economic readings that essentially came in below expectations. Supported by a smaller than expected drop in retail sales reported by the nation’s retailers, the major averages closed higher on Thursday after seesawing through much of the session. After showing some apprehension in Friday’s early trading, as traders reacted to a mixed employment report, the major averages advanced sharply and ended higher, as the shrinking job losses became the focus of traders.
For the week, the Dow Industrials and the S&P 500 Index lost 1.08% and 1.22%, respectively, while the Nasdaq Composite ended down 0.49%.
Among the sector indexes, the Philadelphia Housing Sector Index and the KBW Bank Index fell over 4.5% each for the week, while the NYSE Arca Securities Broker/Dealer Index lost 2.35%. The Dow Jones Utility Average, the NYSE Arca Oil Index, the Philadelphia Oil Service Index and the S&P Retail Index declined over 1% each. On the other hand, the NYSE Arca Gold Bugs Index climbed 12.14% and the Dow Jones Transportation Average rose to 1.06%.