A day after falling the most in 2013, the U.S. stock market
rebounded strongly on the back of good economic data.
In the United States, the ISM Services Index for January was
roughly in-line with expectations while a reading of Eurozone
Composite PMI rose to a 10-month high last month. Investors are
also focused on quarterly earnings results, which have been
Risk assets are enjoying a very strong start to 2013, and
market momentum and general optimism are also fueling gains.
The Dow Jones Industrial Average closed up 99 points, or 0.71
percent, to 13,979.
The S&P 500 rose almost 16 points, or 1.04 percent, to
close at 1,511.
The Nasdaq Composite led the major averages, notching a gain
of 40 points, or 1.29 percent, to just below 3,172.
The ISM non-manufacturing index fell from a downwardly revised
55.7 in December to 55.2 in January. This compared to consensus
estimates which expected a decline to 55.6. The ISM services
index is not a widely watched indicator because of its less
cyclical nature versus the manufacturing index.
Crude oil followed stocks higher on Tuesday. At last check,
NYMEX crude contracts had risen around 0.45 percent and were
trading at $96.60. Brent crude contracts had added around 0.80
percent to $116.46. Natural gas rose over 3 percent on the day to
Precious metals were mixed on the day. Gold was last down
slightly to $1,673 while silver rose slightly to $31.83. Copper
futures were also positive on the day, adding 0.17 percent at
In the agricultural complex, both corn and wheat fell less
than 1 percent. Soft commodities were led by cocoa with a gain of
well over 2 percent.
Late in the trading session, the iShares Barclays 20+ Year
Treasury Bond ETF (NYSE:
) was down around 0.80 percent to $116.09 after a big rally on
Yields rose across the curve as traders sold bonds. The 2-Year
yield added around one basis point to 0.26 percent while the
5-Year yield rose four basis points to 0.87 percent.
The yields on the 10-Year Note and 30-Year Bond were both up
five basis points to 2.01 percent and 3.21 percent,
The U.S. dollar was close to flat on Tuesday with the
PowerShares DB US Dollar Index Bullish ETF (NYSE:
), which tracks the performance of the greenback versus a basket
of foreign currencies, trading down 0.05 percent to $21.70.
The closely watched EUR/USD rose on the day, and was last up
0.56 percent to $1.3585. The Japanese Yen continued its sharp
fall versus the greenback with the USD/JPY climbing around 1.30
percent. The GBP/USD fell 0.55 percent and trading in other major
currency pairs was fairly quiet.
Volatility and Volume
The VIX slumped a day after rising more than 13 percent. The
widely watched volatility index closed down almost 8 percent to
Volume remained very low. Only around 98 million SPDR S&P
500 ETF (NYSE:
) shares traded hands compared to a 3-month daily average of 138
) fell over 10 percent after its fiscal fourth-quarter earnings
) continued to plunge on the day after the Justice Department
accused subsidiary Standard & Poor's of fraud relating to its
ratings of CDOs heading up to the financial crisis.
The news is also hurting competitor Moody's (NYSE:
) for the second straight day with the stock trading down almost
Shares of Virgin Media (NASDAQ:
) surged over 18 percent after numerous reports indicated the
company was close to being acquired by Liberty Global (NASDAQ:
). Virgin Media subsequently confirmed the reports.
Yum! Brands (NYSE:
) fell around 3 percent after releasing quarterly earnings
) jumped more than 19 percent in the wake of its fourth-quarter
Power Integrations (NASDAQ:
) surged to a multi-month high after releasing fourth-quarter
results. The stock closed up more than 14 percent.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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