Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

US Stocks Markets Post Best Single Day Gain of the Year


Today's financial recap and tomorrow's financial outlook.

US equity markets continued their jaunt higher again today. Since last Wednesday's intraday low the S&P 500 (SPX) has recovered 6.62% of its losses in a clear uptrend that indicates a significant supply/demand imbalance. The benchmark index closed up 1.96% for today's session, the largest single day gain of the year, with 97% of the 499 stocks in the index closing positive. Energy and industrials stocks were the leading sectors even though crude was only a modest 0.63% higher. Positive earnings from United Rentals (URI) and a rebound in airline stocks following a US government plan to limit visitors at five airports from nations where Ebola is present were the contributing factors.

Early this morning Reuters reported that the ECB was preparing to purchase corporate bonds as soon as December in addition to its existing covered, and planned asset-backed security purchases next year. The presumption was that the central bank would need to find other assets to buy because of a lack of supply in its existing plan. Although the ECB would later deny this report, market participants still believed it will be a necessary step in the future.

Existing home sales rose to a 5.17 million annualized rate in September from 5.05 million in the month prior. This was better than the 5.10 million expected by economists. Prices continued to drop, however, with the average selling price falling to $255,500 from $263,800 in the month prior.

Yahoo! (YHOO) traded up following the close after the company reported better-than-expected third-quarter results.Yahoo benefited from growth in mobile advertising revenue and the sale of some of its Alibaba (BABA) shares.

Apple (AAPL) rose 2.7% to $102.47 on the back of its strong fiscal fourth-quarter results reported after the close Monday.

McDonald's (MCD) fell 0.6% to $93.01 after originally as its results were well below Wall Street's expectations. Comparable sales fell 3.3% versus the expected contraction of 3.0% with the US and Europe the root cause of the decline. The company also experienced a foreign exchange headwind on its profits.

Tomorrow's Financial Outlook

Market participants will face a tough decision with tomorrow's September consumer price index (CPI) report. Disinflationary pressures have been strong since the beginning of July and this has caused risk assets to be repriced lower. It is highly likely due to the the slowdown in home price increases and drops in gasoline prices that we may see a second consecutive decline in consumer prices. Additionally, we may see a further mitigation in core prices. Last month core prices showed no change, one of the few times that has occurred in the past decade. The question for investors is whether or not that is a positive because it warrants a response from the monetary authorities, the drop in gasoline prices is a synthetic stimulus for consumers, or that it forecasts further declines in risk assets.

Australia will report third quarter consumer inflation figures tomorrow. It does not report CPI each month like most other countries. Because its economy is tied to commodities such as copper and iron ore mining, its currency will react to the report accordingly, especially because the Reserve Bank of Australia (RBA) will likely need to become involved in its currency market. The real fireworks for global economics won't show up until Thursday when preliminary manufacturing data for October will be released for the eurozone.

Thirty seven major US companies are scheduled to report earnings tomorrow. Notables include Boeing (BA), Abbott Labs (ABT), Dow Chemical (DOW), General Dynamics (GD), Stanley Black & Decker (SWK), Biogen (BIIB), US Bancorp (USB), Norfolk Southern (NSU), AT&T (T), Tractor Supply (TSCO), Yelp (YELP), and Skechers (SKX). 

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos