Midday Update: Stocks Rally on Expectations For Easy Monetary Policy, S&P 500 Cracks 2000

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U.S. equity prices were sharply higher Monday, with the S&P 500 climbing above its psychologically key level of 2,000 before easing somewhat in more recent trade. Gains in the biotech sector elevated the Nasdaq Composite to another 14-year high, while financial stocks were fueling the blue-chip index higher. The positive mood was carried by expectations European central bankers were set to provide more stimulus into the regional economy while lackluster economic data at home worked to throw cold water on prospects the Federal Reserve could soon raise interest rates.

Today's economic calendar provided enough evidence of a healthy manufacturing sector, but not enough ammunition for the Fed to consider raising rate ahead of their current timetable. The Chicago Fed National Activity index more than tripled to 0.39 in July, beating the consensus estimate for an increase to only 0.20 from 0.12 the month prior.

The Dallas Fed Manufacturing Index, however, fell to 7.1 in August, well below estimates for a slight gain to 13.5 from 12.7 in July. The index which measures production slid as well, to 6.8 this month versus 19.1 prior.


The services sector is still strong but growth has begun to moderate according to the Purchasing Manager's Index which retreated to 58.0 in August from 61.0 the month prior. The street was looking for an improvement to 62.0.

Finally, the headline release was new home sales which declined to a seasonally-adjusted annual rate of 412,000 in July, missing estimates for a gain to 430,000 from 406,000 in June.

EU-zone equities are higher as well after European Central Bank Mario Draghi's dovish comments in Jackson Hole last week fueled speculation that the EU central bank would introduce unconventional stimulus measures such as quantitative easing. Gains in Europe overnight spilled into the early U.S. session, underpinning another impressive day on Wall Street.

Crude oil was down $0.93 to $93.42 per barrel. Natural gas was up $0.09 to $3.98 per 1 million BTU. Gold was down $2.80 to $1,277.40 an ounce, while silver was down $0.06 to $19.40 an ounce. Copper was up $0.01 to $3.23 per pound.

Among energy ETFs, the United States Oil Fund was down 0.33% to $34.85 with the United States Natural Gas Fund was up 2.31% to $21.70. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 1.39% to 25.69 while SPDR Gold Shares was down 0.29% to $122.83. The iShares Silver Trust was down 0.61% to $18.58.

Here's where the U.S. markets stand at mid-day

NYSE Composite Index up 65.53 (+0.60%) to 11,012.86

Dow Jones Industrial Average up 82.10 (+0.48%) to 17,083.32

S&P 500 up 8.48 (+0.43%) to 1,996.88

Nasdaq Composite Index up 12.41 (+0.27%) to 4,550.96

GLOBAL SENTIMENT

Nikkei 225 Index up 0.48%

Hang Seng Index up 0.22%

Shanghai China Composite Index down 0.51%

FTSE 100 Index down 0.04%

CAC 40 up 2.10%

DAX up 1.83%

NYSE SECTOR INDICES

NYSE Energy Sector Index down 1.06%

NYSE Financial Sector Index up 0.80%

NYSE Healthcare Sector Index up 0.51%

UPSIDE MOVERS

(+) DGLY (+56.93%) Obama orders review of military hardware distribution to U.S. police forces.

(+) THI, (+21.00%) In talks with Burger King ( BKW ) to create world's third largest quick service restaurant.

(+) AMPE (+10.95%) Issues letter to shareholders regarding the STEP study and Ampion filing

(+) NLST (+19.60%) Receives favorable decision in reexamination of LRDIMM patent at USPTO.

DOWNSIDE MOVERS

(-) HTBX (-11.98%) $7.5 mln financing comes in tranches, bank receives warrant priced at discount.

(-) RGDO (-58.50%) Terminates enrollment In Revolixys Kit trial.

(-) GEF (-5.83%) Revised FY14 guidance downward.



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 (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.



This article appears in: Investing , Commodities

Referenced Stocks: BKW

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