Bulls hold reins as holiday nears

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Stocks are drifting higher today as short-term momentum remains bullish heading into Labor Day.

S&P 500 futures are up 0.3 percent, while the Nasdaq 100 is indicated higher by more than 0.4 percent. Markets also gaining about 1 percent across the Atlantic after European Central Bank President Mario Draghi signaled late Friday that he's willing to use monetary stimulus to counter slow growth. Asia was mixed overnight.

The S&P 500 has been rallying in the last two weeks after touching support at its 100-day moving average in early August. Traders now face a week that's likely to have light volume because of the Labor Day holiday next Monday, Sept. 1, though there are some important catalysts: New-home sales come out at 10 a.m. ET today, durable-goods orders are released tomorrow, and revised second-quarter gross domestic product follows Thursday. Several retailers announce earnings as well.

Economic data has remained strong in the United States, most recently highlighted by strong housing data. But Europe has struggled, driving the euro to its lowest levels in almost a year. Draghi's policy response could be increasingly important to sentiment going forward because U.S. central bankers may resist raising interest rates when Europe is easing.

Merger activity is back in focus for company-specific news today. InterMune surged 36 percent after accepting an $8.3 billion takeover by Roche. Tim Horton's and Burger King both gained more than 15 percent on news they may combine. Ann also rose 2 percent after activist investors Engine Capital and Red Alder said the retailer was undervalued and should consider strategic alternatives.

Chinese Internet stock Qihoo 360 Technology is down almost 5 percent despite strong quarterly results. U.S. Steel also gained 3 percent after being upgraded two notches by Credit Suisse to "outperform" from "underperform."

Transportation-related stocks such as airlines, oil tankers, railroad suppliers, ocean shippers, and car-rental stocks have led the market higher during its rebound in the last two weeks. Our researchLAB analytics tool also shows money flowing into stocks associated with housing, plus retailers and solar-energy. Energy has struggled.

Oil is fractionally higher this morning and is trying to halt its two-month slide. Copper also gained about 0.3 percent, remaining bullish after major trading shop Glencore said last week demand was improving for the metal. Precious metals are little-changed, and agricultural products are mixed.

Euro weakness remains the dominant theme in foreign-exchange markets, with the common currency once again down across the board. 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: SPX

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