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Bulls Fight Back, Push Correction Off for Another day


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

US fighter jets dropped artillery on ISIS targets in Iraq soon after President Obama authorized military action.

However, the financial markets roared back to life on anticipation of progress in Ukraine, as news service Interfax reported that Russia ended its military exercises near the Ukraine border.

That drove a reversal in US stocks, and the S&P 500 finished up 1.2% on the day at 1931.59.

On a technical basis, the S&P drove solidly back above the 100-day moving average that has acted as a key support area over the past two years.

Additionally, the continued rally off Thursday's low of 1904.78 kept the market safely away from the 5% pullback level as measured from the 1991.39 all-time high, a sign of resilience on the bulls' part.

US Treasury yields creeped back up intraday following an early dip, and Russian equity ETFs like the Market Vector Russia ETF Trust (RSX) performed well.

We also saw a bounce in German DAX futures. German stocks have been under pressure as of late since the nation's economy has heavy exposure to Russia.

In earnings news, auto parts company Magna (MGA) rose 6.0% to $111.44 after reporting solid second-quarter earnings.

Chipmaker NVIDIA (NVDA) bounced 8.8% on its own impressive second-quarter report.

News Corp. (NWSA) slid 1.6% as it squeaked past Wall Street's revenue expectations, but missed on earnings.

On the economics front, second-quarter preliminary nonfarm productivity rose 2.5%, exceeding the 1.6% consensus. Unit labor costs rose 0.6%, under the 1.0% expected.

Wholesale inventories rose 0.3% in June, below the 0.7% economists were forecasting.

Tomorrow's Financial Outlook

In keeping with recent history, market activity near-term is likely to be impacted by geopolitical developments in Ukraine and the Middle East. Earnings season is largely over, and there are no major US economic data releases on Monday.

With US Treasuries and the US dollar having possibly topped out near-term, the stage may be set for a return to risk, assuming we don't walk into any surprising bad news on Monday.

Twitter: @Minyanville

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No positions in stocks mentioned.

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