Stocks rise after holding ground

By David Russell,

Shutterstock photo

Stocks are slightly higher this morning, one session after holding their ground at a key support level.

S&P 500 futures are up about 0.1 percent, while most European indexes are rising by about 0.5 percent. India and China climbed overnight as well, but Tokyo lagged with a 2 percent drop.

The S&P 500 fell to its lowest price in more than a month yesterday, but then rebounded to break a three-day slide. It also bounced at its 50-day moving average and remained above its previous peaks from December and January. That suggests that the longer-term uptrend is still intact.

But the real story continues to be international stocks and emerging markets, which have thoroughly outperformed domestic markets in the last month. Turkey, Brazil, and Colombia have led the advance, according to optionMONSTER's proprietary researchLAB market-analysis tool.

There's also been a shift in foreign exchange and interest rates. The U.S. dollar has weakened against currencies associated with growth, such as the euro, Australian dollar, and Canadian dollar. Bond yields have also fallen as investors scale back expectations for inflation and central-bank tightening. That's fueled a stealth rally in utilities and real-estate investment trusts.

Energy and basic metals have benefited the most, along with Latin American banks and utilities. Consumer discretionaries and health care, the former leaders, have moved to the bottom of the totem pole in the last month.

In company-specific news, Alcoa is up 3 percent up after reporting better-than-expected profit yesterday afternoon, though revenues lagged forecasts. Intuitive Surgical fell 7 percent after warning that sales will miss estimates. Constant Contact surged 14 percent after raising guidance. Constellation Brands is up 3 percent on strong bottom-line results.

Today's other calendar items are crude-oil inventories at 10:30 a.m. ET and minutes from the last Federal Reserve meeting at 2 p.m. ET.

Foreign-exchange markets paint a modestly bullish picture this morning, with the safe-haven Japanese yen lower across the board. Commodities are mixed, with oil and grains fractionally higher but metals lower.

Disclosure: I own AA calls.

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

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

This article appears in: Investing Options
Referenced Stocks: SPX

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