Stocks rise before housing data

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Stocks are inching higher as Iraq fears subside and investors prepare for housing data today and the Federal Reserve's meeting tomorrow.

S&P 500 futures are up more than 0.1 percent, matching gains of a similar size in Europe. Asia was mixed overnight, with Mumbai climbing 1.3 percent but Shanghai lower by 0.9 percent. Hong Kong fell 0.4 percent, while Tokyo rose 0.3 percent.

The S&P 500 is less than 1 percent below its all-time high and is holding its ground following a quick pullback last week. It's been supported by an improving economic backdrop, low inflation, and modest geopolitical risk. Last week's gains by Iraqi rebels threatened the calm, but now it now appears that the United States will use air strikes if needed to protect Baghdad.

Yesterday also brought strong data: The New York Fed's Empire Index of manufacturing activity came in well above estimates for the second straight month, and NAHB's homebuilder index beat forecasts. Industrial production and capacity utilization were both stronger than expected in May. While no single report is of major significance, together they paint the picture of a strong economy.

Housing starts and building permits are the next big items at 8:30 a.m. ET today. Consumer prices come out at the same time but are unlikely to affect sentiment because inflation has not been a worry to investors. The main earnings report comes from Adobe Systems after the closing bell today. Tomorrow afternoon, the Fed announces monetary policy.

While energy has been the strongest sector in the last week, our researchLAB market scanner has also shown strength in solar stocks, semiconductors, ocean shippers, and cloud software.

The calmer situation in Iraq has oil off about 0.4 percent, while gold and silver are down about 0.7 percent. Copper is up 0.2 percent. Currencies reflect a modestly bullish sentiment as the safe-haven Japanese yen edges lower against the U.S. dollar and euro.

In company-specific news, Edwards Lifesciences rose 6 percent after announcing that the Food and Drug Administration had approved its second generation Sapien XT TAVR device  for the treatment of high-risk and inoperable patients suffering from severe symptomatic aortic stenosis.




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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