Stocks are indicated higher today as sentiment remains bullish.
S&P 500 futures are up by more than one-third of a percent but
have been weakening in the last hour. Europe is trading similarly
and Asian markets rebounded from declines on Monday, led by a 1.5
percent advance in Tokyo.
The S&P 500 has spent more than two weeks refusing to back down
from its previous all-time high of 1687 established May. During
that time, investors have been preparing for the stream of economic
and corporate news that starts to flow today.
The first report across the Atlantic showed European economic
sentiment at a 15-month high, although the reading slightly missed
forecasts. The Case-Shiller index of home prices and consumer
confidence follow at 9 a.m. ET and 10 a.m., respectively.
Economic news intensifies tomorrow with private-sector payrolls,
second-quarter gross domestic product, and the Federal Reserve's
interest-rate decision. Later in the week we'll also get central
bank news from Europe, plus key manufacturing and employment data
for the United States.
Despite the S&P 500 holding these long-term highs, it closed
below its 10-day moving average for the first time all month
yesterday, which could make some traders expect a reversal lower.
There has also been an uptick in mergers and acquisitions in recent
weeks, with at least three deals yesterday and a $7.6 billion
purchase of hospital chain Health Management Associates by
Community Health. Takeover activity has been very quiet for most of
the year, so increased volumes could provide another catalyst for
the S&P 500 to keep rising.
stock scanner shows broad strength, with every major sector up in
the last month and since the beginning of 2013. Leadership has
steadily rotated from one group to another as investors find value
across the market. Materials and technology, for instance, are the
two strongest sectors in the last week despite being the worst
performers on a year-to-date basis.
The last week has also shown a rotation into Spanish banks, among
the worst performers in recent years amid worries about Europe's
debt problems. Videogames, snowmobile makers, loan-servicing
companies, and 3-D printers have outperformed as well.
Commodity trading is more cautious today as copper falls 1.5
percent and oil declines about half a percent. Silver and gold are
also down, though most agricultural foodstuffs are mixed.
Foreign-exchange markets paint a similar picture, with the euro up
slightly but the Japanese yen stronger. The Australian dollar,
which tends to follow commodity prices, is down by more than 1
In company-specific news, HMA is lower because the takeover price
it accepted is lower than some investors had expected. Fertilizer
stocks such as Mosaic are also lower after Russia's Uralkali pulled
out of a potash cartel, threatening to send prices lower.
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